Intuit taking Microsoft seriously
Stephen Bennett, CEO, Intuit
"A delightful recurring revenue stream," Intuit CEO Steve Bennett said Tuesday, describing his company's tax business. "While most of you hate taxes, at Intuit, we love taxes."
After market close Tuesday, the publisher of tax and finance software for consumers and small businesses posted a fiscal fourth-quarter loss of $61.3 million, or 29 cents per share, including investment losses, amortization costs and acquisition-related expenses. On a pro forma basis that excludes those items, Intuit lost $17.1 million, or 8 cents per share, in the quarter ended July 31.
Analysts surveyed by earnings tracking firm First Call produced a consensus forecast calling for a loss of 10 cents per share for Intuit's fourth quarter. Analyst estimates normally leave out one-time charges and amortization.
Shares of Intuit traded at $32.09 in after-hours activity on the Island ECN after the release of quarterly results. Intuit fell $1.75, or 5.61 percent, to $29.45 in Tuesday's regular trading ahead of the news.
Fourth-quarter revenue increased 18 percent year over year to $191.2 million, with Quicken Loans and payroll services leading the way, the company said. The First Call consensus predicted revenue of $190 million. Payroll is part of the company's tax business.
For the fiscal year, Intuit reported pro forma net income of $184.1 million, or 86 cents per share, on revenue of $1.26 billion. Full-year revenue increased 15 percent from fiscal 2000.
Tax business increases
The company's tax-related business increased 25 percent in fiscal 2001 and generated almost half of Intuit's annual revenue. And company executives believe rapid growth in tax products should continue because tax laws change every year.
"Even in difficult times, people still have to pay taxes," Bennett said. "And our tax business continues to grow, because taxes continue to get more complicated."
Intuit's QuickBooks accounting package for small businesses and Quicken.com Web site disappointed the company in the fourth quarter, executives said.
Although QuickBooks added 427,000 customers in fiscal 2001, that was short of Intuit's original expectations for the year. Intuit has blamed a surge of upgrades from the previous year for hurting QuickBooks sales in 2001.
Quicken.com continues to suffer from the advertising slowdown hitting the entire Web industry. Although advertising is not a significant part of Intuit's business, the decline affected fourth-quarter earnings more than people might think because much of the ad revenue from last year's fourth-quarter had small costs associated with it, said Greg Santora, Intuit's chief financial officer.
Intuit stuck to its previously announced goal of 15 percent to 20 percent revenue growth in fiscal 2002, although the company sees lower-than-expected revenue in the first quarter. The company's latest financial targets call for first-quarter revenue of $200 million to $210 million, below First Call's projection of $220 million.
Intuit cut 60 jobs during the fourth quarter, mostly at Quicken.com, executives said.
But Intuit also predicted stronger holiday sales than analysts were looking for. The company now sees fiscal second-quarter revenue ranging between $530 million and $550 million, compared with First Call's estimate of $525 million.