Intuit Inc. (NASDAQ: INTU) is slated to report its first quarter financial results on Nov.21. The company will host a conference call on the same day at 1.30 Pacific Time to discuss the operating performance.
Intuit makes tax preparation and payroll processing softwares. The company's key products include include QuickBooks, Quicken and TurboTax. Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year 2013. The company has approximately 8,000 employees with offices in the United States, Canada, the United Kingdom, India and other locations.
Wall Street expects Intuit to report a loss of 10 cents a share, according to analysts polled by Thomson Reuters. In the same period last year, it reported a loss of 3 cents a share. Intuit projects GAAP and non-GAAP net loss per share of 10 to 11 cents for the August to October period.
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The company's results have managed to beat Street view thrice in the past four quarters. However, the consensus loss estimate has widened from 2 cents in the past 90 days, indicating analysts have a bearish stance on the company's earnings prospects for the quarter.
Quarterly sales are expected to fall 6.8 percent to $603 million from $647 million in the same quarter last year. Intuit sees first-quarter revenue of $595 million to $605 million, growth of 6 to 8 percent.
Intuit has built an impressive franchise for financial management software focused on small business and individuals, with high recurring revenues, strong financial management and shareholder friendly cash use (buybacks and dividends).
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Weakness in tax is being offset by ongoing strength in small business where Intuit aims to be the "small business OS," and the acquisition of Demandforce would help the company in gaining more SMB business.
Intuit covers 5 million out of 29 million small business! es in U.S. and about 1 percent of 600 million small businesses worldwide. It processes less than 1 percent of the $2 trillion in commerce managed through QuickBooks (QB). This underscores the huge market available in front of Intuit.
The Street would be focusing on competition around QuickBooks and the uptake of the next generation of QuickBooks Online. QBO was re-written from scratch starting 2 years ago, using JavaScript and HTML5, and features an entirely modern Cloud stack that is more open to partners, including Square that was announced recently.
Investors will look at how tax trends are faring and how the company is coping with the current situation and what it is expecting for the future periods. Tax season can be volatile especially due to Congress delays around funding/budgets.
International business should be another focus point as the company is in early stages of exploring countries beyond U.S. and Canada.
"While int'l revs have been stuck at <5% of revs, we may see it break out during the next 5 years," UBS analyst Brent Thill wrote in a note to clients.
The previous quarter's results were marred by higher costs that weighed on margins and the profits. So, the Street would welcome any improvement in cost reductions.
The market may want some color on the competition in payment processing space, and how Intuit is faring against leading payroll solution provider Paychex Inc. (NASDAQ:PAYX) in the SMB arena.
Investors will want an update on management's full year outlook. It forecasts revenue of $4.440 billion to $4.525 billion, growth of 6 to 8 percent, GAAP EPS of $3.11 to $3.19 (growth of 10 to 13 percent) and non-GAAP EPS of $3.52 to $3.60 (growth of 10 to 13 percent).
For the fourth quarter, Intuit reported a net loss of $16 million or 5 cents a share, compared with a net profit of $4 million or 1 cent a share last year. Excluding items, the company reported adjusted profit of $1 million or breakeven earnings per share for the quarter. Mou! ntain Vie! w, California-based company's revenue for the quarter grew 12 percent to $634 million.
INTU stock is up 16 percent since its last quarterly report and 19 percent this year. Shares of the company, which trade at 18 times its forward earnings, have traded between $55.54 and $73.94 during the past 52-weeks.
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