H&R Block reports higher loss in off-season quarter

H&R Block Inc. reported on Monday a 9.7 percent higher loss in its off-season second fiscal quarter with a slight increase in revenues.

The $113 million loss, during the three months ended Oct. 31, was up from a $103 million loss a year earlier. Revenues reached $135 million in the quarter, up form $134 million a year ago.

The Kansas City-based tax preparation company does the bulk of its business during the three months that end in April. It typically loses money in its second quarter when it prepares for the upcoming tax season.

“We've made important investments in our business this year, which will enable us to improve the customer experience and operate more productively in the coming years,” H&R Block chief executive Bill Cobb said in the announcement. “Our Tax Plus strategy is yielding results, and we look forward to continuing our strong momentum this tax season.”

Tax Plus is the company’s effort to provide financial services beyond tax preparation, such as offering its Emerald prepaid MasterCard to consumers.

In its brief news release, Block said a company handling claims related to Block’s former subprime mortgage business reached a settlement on some of those claims.

Sand Canyon Corp., which Block emphasizes is “a separate legal entity from H&R Block,” reached the settlement last Friday. It did not disclose any of the terms.

Amounts paid under the settlement would come from funds previously accrued to cover them, Block’s announcement said. Sand Canyon had $194 million accrued for related-to representation and warranty claims at the end of October.

H&R Block’s recent loss equaled 41 cents a share, higher than the 38 cents a share it lost a year earlier.

Shares of H&R Block fell Monday by 34 cents, or about 1 percent, to close at $34.05 prior to the earnings report. For all of 2014, the stock has climbed 17.25 percent.

Executives will discuss Block’s plans for the upcoming tax season during a conference call Tuesday. The call begins at 7:30 a. m. and will be broadcast on the company’s website.

This story was originally published December 8, 2014 at 3:36 PM with the headline "H&R Block reports higher loss in off-season quarter."