Wednesday, June 12, 2013

BCOR: H&R Block Misses Q4 Expectations

H&R Block (HRB) disappointed on the top and bottom-line with EPS of $2.54 and revenues of $2.2bil, missing the $2.60 and $2.3bil estimates, respectively.  While this, along with profit taking, may explain Blucora's (BCOR) decline lately, it will likely push the stock down a bit further.  Of course, BCOR is up 18.2% since we suggested it, compared with S&P 500's 6.9% gain. And BCOR did hit its 52-week high of $18.92 in late May. 

When it comes to BCOR, we believe the HRB miss will be forgotten about soon.  As a reminder, BCOR's fiscal calendar is the same as the regular calendar.  For this reason, most of BCOR's tax services revenues were already reported in its Q1 report, and were impressive.  In addition, the very narrow-range guidance that the Company provided for Q2 tax service revenues, $23.0MM - $23.5MM, shows that management had a pretty good idea about revenues coming in during Q2.  For this reason, the risk of BCOR missing on the top-line in Q2 is minimal.

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