Earnings Preview: Intuit

Nov.17.11 | About: Intuit Inc. (INTU)

Intuit (NASDAQ:INTU) is expected to report Q1 earnings after the market close on Thursday, November 17, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is (12c) for EPS and $580.66M for revenue, according to First Call. Intuit is expected to report another loss in Q1, which is always its weakest quarter. Due to its tax and financial software focus, Intuit always posts its strongest results in fiscal Q2 and Q3. Management previously provided Q1 revenue guidance of $575M-$585M, representing a year-over-year increase of 8%-10%. Non-GAAP Q1 operating loss is projected to come in between $40M-$50M, and (11c)-(13c) per share. Commentary about the upcoming tax season following the company's Q1 results is considered to be more important than the topline number for Q1.

Analyst Views

After speaking with Intuit's QuickBook partners, Citigroup believes that small business demand is sound, with adoption of ancillary services accelerating. Citigroup expects Intuit's Q1 results to be towards the high-end of guidance, consistent with the firm's $583M revenue estimate, which is ahead of the consensus estimate. A significant ramp in hiring by Intuit during the past few months suggests earnings is more likely to be at the low-end of guidance, although EPS this quarter is less meaningful than at other times of the year, Citigroup notes. The firm is expecting Intuit's Q2 guidance to be in-line with the consensus estimate of EPS of 43c on $1.0B in revenue, although the firm's bias is to the upside. Investors will focus on: 1) Commentary around 2011 tax season; 2) The macro/SMB outlook; 3) Competitive dynamic within the tax sector after the acquisition of TaxAct by H&R Block (NYSE:HRB) was halted by the Department of Justice. 4) QuickBooks metrics such as unit growth and online transition. Management is not expected to revise its prior FY12 guidance of $4.185B-$4.285B in revenue, operating income of $1.400B-$1.425B and FY12 EPS of $2.85-$2.94