H&R Block Q1 Loss Widens on Mortgage Woes

H&R Block reported a Q1 net loss of $302.6M, or -$0.93/share, more than double last year, as losses from its Option One mortgage arm totaled $192.8M. Excluding Option One and other items, H&R Block lost $0.34/share, better than estimates of a $0.36 loss. Sales rose 11% to $381.2M, but came up short of expectations ($448.4M). H&R Block said it is trying to renegotiate the sale of Option One to a subsidiary of private equity firm Cerberus. The original agreement (still in effect if a new agreement is not reached) has the transaction slated to close before December 31, but H&R Block said in a press release "... there can be no assurance it will close." H&R Block narrowed its full-year guidance for earnings from continuing operations to $1.30-$1.45, from $1.25-$1.45 previously. Analysts had forecast $1.33/share on average. Shares of H&R Block were down 4.5% in light pre-market trading, after gaining 3.5% to $19.50 on Wednesday.

Sources: Press release, Bloomberg, MarketWatch
Commentary: H&R Block Taps Credit Lines • Housing Bubble and Real Estate Market Tracker • Berkshire Hathaway Releases Latest 13F: Summary of Holdings
Stocks/ETFs to watch: HRB. Competitors: INTU, JTX

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