Exit From Subprime Business Helps H&R Block Swing to Profit
June 30 2008 - H&R Block Inc., the biggest U.S. tax preparer, reported its first quarterly profit in two years after selling the loan-servicing unit to Wilbur Ross’s firm. The firm gained 7.9 percent in New York trading after boosting the dividend and announcing a $2 billion share repurchase plan.
Fourth-quarter net income was $543.6 million, or $1.66 a share, compared with a loss of $85.6 million, or 26 cents, a year earlier, the Kansas City, Missouri-based company said today in a statement. Income from continuing operations was $691.1 million, beating the $667 million average estimate of three analysts surveyed by Bloomberg.
Chairman Richard Breeden, a hedge fund manager and former head of the U.S. Securities and Exchange Commission, has said he wants to gain 55 million new tax preparation customers in a “major assault” on the industry. Breeden closed a $1.3 billion sale of H&R Block’s mortgage servicing unit to WL Ross & Co. in May, completing the company’s exit from a subprime mortgage business that caused more than $1 billion in losses.
H&R Block Has First Profit Since 2006 After Unit Sale
by Hugh Son and Andrew Frye | Bloomberg
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