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H&R Block Inc. Earnings Decline In Q4

06/11/2019

John Wiley beats profit, revenue expectations

John Wiley & Sons Inc. (JWA) reported profit rose in the fourth quarter due to higher sales and a lower provision for income taxes compared with the same quarter a year ago.

The Hoboken, N.J.-based publisher reported net income of $63.2 million, or $1.10 a share, up from $54.1 million, or 93 cents a share, a year earlier.

Excluding foreign exchange losses and restructuring charges, adjusted earnings were $1.05 a share. Analysts polled by Refinitiv were looking for $1.03 a share.

Revenue rose 2.9% to $491.2 million, above the consensus forecast of $489.7 million.

Write to Kimberly Chin at [email protected]

H&R Block’s stock jumps after profit beat, raised dividend and $405 million acquisition

Shares of H&R Block Inc. HRB, -0.99% surged 5.1% toward a 6-month high in premarket trade Tuesday, after the tax preparation services company reported fiscal fourth-quarter profit and revenue that beat expectations, boosted its dividend and announced the acquisition of Wave Financial Inc., a small-business financial solutions platform. Net income for the quarter to April 30 fell to $877.9 million, or $4.29 a share, from $1.1 billion, or $5.42 a share, in the year-ago period. The FactSet earnings-per-share consensus was $4.13. Revenue slipped to $2.33 billion from $2.39 billion, just above the FactSet consensus of $2.32 billion. For fiscal 2019, tax returns prepared by or through the company rose 1.5% to 20.3 million. The company raised its quarterly dividend by 4% to 26 cents a share, with the new dividend payable July 1 to shareholders of record on June 21. Based on Monday’s stock closing price of $26.94, the new annual dividend rate implies a dividend yield of 3.86%, compared with the implied yield for the S&P 500 SPX, +0.47% of 2.00%, according to FactSet. Separately, H&R Block said it extended its current stock repurchase program, which has $ billion remaining, by three years to June 2022. And the company said it was paying $405 million in cash for Wave Financial, to expand its product and client portfolio and enhance its position in the small-business market.

SC gun supplier files for bankruptcy; majority owner sued

A South Carolina gun and sporting goods distributor is filing for bankruptcy amid allegations of mishandled funds borrowed by its majority owner.

News outlets report Ellett Brothers has its first hearing in bankruptcy court on Tuesday.

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Lending company Prospect Capital Corporation is suing the distributor's majority owner, Wellspring Capital Management. Prospect says it lent Ellett Brothers $160 million to shore up the distributor, but the money went instead to Wellspring shareholders.

Wellspring is a private equity firm in New York that bought Ellett Brothers in 2008.

Attorneys for Ellett Brothers and for Wellspring couldn't immediately be reached for comment.

The distributor's corporate parent, SportsCo Holdings Inc. says it plans to liquidate its holdings, citing excessive debt and inventory.

H&R Block To Buy Wave Financial For $405 Mln; Boosts Qtly Dividend – Quick Facts

Consumer tax services provider H&R Block, Inc. (HRB) agreed Tuesday to acquire all outstanding shares of Canada-based Wave Financial, Inc. a small financial solutions platform, for $405 million, funded with available cash. The transaction is expected to close in the next few months, subject to regulatory approval and customary closing conditions.

The acquisition of a highly compatible business will accelerate H&R Block’s strategy in the large and expanding small business market, providing new growth opportunities. Based on the expected timing of closing, H&R Block estimates that the transaction will generate $40 to $45 million of revenue for fiscal 2020.

Wave provides accounting, invoicing, payroll, and payments software solutions, as well as bookkeeping services, built into a comprehensive platform used by over 400,000 small businesses every month.

Following the closing of the transaction, Wave will maintain its leadership team, including Kirk Simpson, operating independently within H&R Block from its headquarters in Toronto, Ontario.

Additionally, the company announced that its Board of Directors approved a 4 percent increase in its quarterly cash dividend to $0.26 per share, payable on July 1, 2019 to shareholders of record as of June 21, 2019.

The company also announced that its Board of Directors extended its previous share repurchase authorization three years. Approximately $1.0 billion remains under this authorization, which now expires in June 2022.

Gold Prices Slip As Dollar Steadies

Gold prices fell slightly on Tuesday and the dollar steadied above a recent two-and-a-half-month low as investors shifted their focus to the G20 meeting in Osaka, Japan, on June 28-29.

Spot gold dipped 0.4 percent to $1,322.51 per ounce while U.S. gold futures were down 0.2 percent at $1,326.25 an ounce.

U.S. President Donald Trump renewed his threat to impose tariffs on Mexico if certain aspects of a deal reached last week were not implemented.

Trump plans to go ahead with the proposed tariffs if Mexico’s Congress did not back part of the deal.

Investors were also reacting to Washington’s fresh trade threats against China.

Trump told CNBC he stands ready to hit China with more tariffs on at least $300bn worth of goods if Chinese President Xi Jinping does not attend a planned meeting at the G-20 summit later this month.

However, Beijing has not formally confirmed any plans or provided any details of the high-stakes meeting.