H&R Block drops to bottom of leaderboard after quarterly results

Tax-service firm H&R Block´s quarterly results were wide of expectations, sending its shares to the bottom of the pile on the S&P 500.

Revenue for the fiscal first quarter was $125m while it was expected to fetch $132.62m according to analyst estimates. Adjusted earnings per share for Q1 were two cents worse than predicted, coming in at $0.55.

H&R were keen to play down the results, referring to the "highly seasonal nature" of their business during the quarter as normally lower than that of other reporting periods.

"Because of the highly seasonal nature of our business, the fiscal first quarter is not indicative of our full year results. That said, all of the company's efforts remain laser-focused on executing a successful tax season," said president and CEO Bill Cobb.

For the period to July 31, the company showed $123.7m in losses, much wider than its loss of $99.7m for the same period last year.

“The fiscal first quarter typically represents less than 5% of annual revenues and less than 15% of annual expenses,” the statement read.

The sale of H&R's bank business to BOFI in September 2015 was thought to be a major cause for Wednesday´s poor results, having led to the reclassification of some of its revenue streams and the loss of some income from investments.

As of 1650 BST stock in H&R was down by 10.37% to $21.69.