Intuit Q3 tops estimates, busy tax quarter pays off; outlook weaker than expected

Summary:The tax year is over, and the financial services and accounting software company reaped the benefits in its third-quarter earnings.

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Image: Intuit

As U.S. tax season wraps up, Intuit saw a strong financial quarter in its busiest three-month period of the year.

The tax and accounting software company reported on Tuesday third-quarter income of $984 million with earnings of $3.53 per share (statement), beating analyst expectations.

Non-GAAP earnings were $2.94 per share on revenue of $2.39 billion, up 14 percent year-over-year.

Wall Street was expecting $3.50 per share on revenue of $2.38 billion.

At the end of the third quarter, Intuit had $2.6 billion of cash and investments.

In prepared remarks, chief executive Brad Smith said the company's momentum was building as it continues to transition to the cloud.

"Executing against our growth strategy we delivered strong results across the board. We grew share in our tax businesses, and our small business subscriber growth continues to accelerate globally," he added.

Quickbooks, the company's small business accounting software, saw subscribers jump by 36 percent to 624,000 during the quarter. Meanwhile, TurboTax Online units jumped by 14 percent in the tax season, which ended mid-April.

Looking ahead to the coming fourth quarter, Intuit said it expects revenue to land between $683 million and $713 million. The company also expects earnings per share to land in between 6 cents and 8 cents. 

Wall Street was expecting 12 cents per share on revenue of $713 million. 

It's not a surprise considering the company bets most of its financial reporting on the third quarter, in the midst of everyone filing their taxes with the federal and state governments.

But the drop in fourth quarter outlook took a toll on the company's share price in after-hours trading.

Shares in Intuit ($INTU) on the Nasdaq stock exchange in New York closed the day down by 0.3 percent to $76.84. The company fell in after-hours trading by almost 5 percent.

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Image: Google Finance

Topics: Cloud

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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