Friday, May 18, 2012

Intuit (INTU) Reports Q3 2012 Earnings

Intuit gained $2.51 per share, beating estimates of $2.48 by $0.03 on the quarter. Revenues grew by 5% year over year with revenues of $1.945 Billion. Barely missing revenue estimates of $1.960 Billion. Strong revenue was driven by performance in the Consumer Tax Segment with 3% growth during this quarter compared to Q3 of the year prior. Total Small Business Segment revenue grew by 11%, contributing to this segment was growth in Payment Solutions & Employee Management Solutions. Intuit was able to beat EPS estimates by expanding margins during the quarter, despite a slight miss on the top line.

Intuit management reaffirmed full year 2012 revenue guidance of $4.185-$4.285 Billion. Management guided for a less than expected quarter loss for Q4 2012. Typically, Q3 is Inuit’s strongest and most critical quarter of the year. This is due to tax season and the revenue provided by Intuit’s TurboTax product. National tax filings were up 2% this year, which was greater than expected. Yet, TurboTax was not able to match this upward trend. Management expected more out of their team on the quarter and will evaluate ways to boost revenue next year.

During the quarter Intuit made two strategic acquisitions with hopes of increasing revenue in the Payment Solutions segment. The long-term goal is for companies to integrate credit card payments processing with QuickBooks. This offers Inuit’s customers’ payments processing solutions with the software they already have in place. In future quarters this could be a sizable area of expansion due to the attractiveness of this idea to many small businesses.

Intuit remains exposed to 95% U.S., which offers investors a degree of safety from European economic exposure.

Early in May the board of directors approved a $0.15 dividend to be paid on July 18th during the quarter ahead.
-George Hoffmann

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