Intuit Inc. (INTU) is scheduled to announce its first quarter 2013 results on November 15, 2012 and we see no movement in analyst estimates so far.
Fourth Quarter Overview
Intuit reported fourth quarter 2012 loss per share of 8 cents, wider than the Zacks Consensus Estimate of 4 cents loss per share.
Revenue increased 13.6% from the year-ago quarter to $651.0 million. Reported revenue was within the company’s guidance range. Revenue improved due to decent performances of all the segments barring the Financial Services segment, which posted a year-over-year decline.
Lackluster revenue growth (due to seasonality) coupled with cost increases resulted in the operating loss.
First Quarter Outlook
For the first quarter of fiscal 2013, the company expects revenues in the range of $630.0 million to $640.0 million. GAAP operating loss is expected in the range of $85.0 million to $90.0 million. Non-GAAP operating loss is estimated to be in the $20.0 million to $25.0 million range. GAAP loss per share is projected at around 20 cents to 21 cents. The company also expects non-GAAP loss per share in the 6 cents to 7 cents range.
Agreement of Analysts
Most of the analysts are of the opinion that Intuit will likely report as per its guidance. Though tax-related revenues will likely lack luster, analysts expect financial management and payroll segments to perform steadily. They also expect the small and medium business (SMB) segment to witness decent improvements stemming from good payroll business.
All the 6 estimates for the first quarter were maintained over the last 7 days, reflecting a lack of potential catalysts. On the other hand, out of the 9 estimates available for fiscal 2013, 1 estimate moved upward.
Magnitude of Estimate Revisions
The magnitude of revisions has been minimal since the company reported its fourth quarter results. For the past 7 days, the Zacks Consensus Estimate for the upcoming quarter remained unchanged at 17 cents loss per share. But the estimate for fiscal 2013 inched up by a penny to $2.95. Over the last 90 days, estimates for the first quarter and fiscal 2013 dropped by a penny and 3 cents, respectively.
Over the years, Intuit has posted losses in its fourth and first quarters due to seasonality. Its QuickBooks, Consumer Tax and Accounting Professionals revenues tend to be lowest during the fourth and first quarters. We believe that Intuit is set to report within its guided ranges.
Another thing that needs to be kept in mind about Intuit is the growth/decline in employment in the small and medium business sector, which happens to be the growth driver of the company. The current situation in the SMB job market is not very encouraging and the numbers have declined since May (as per Intuit’s Small Business Revenue and Employment Indexes).
Intuit is also up against the leading payroll solution provider Paychex Inc. (PAYX), which introduced certain tools to solve specific tax-credit-related problems for SMBs.
But we believe that the acquisition of Demandforce in May will give enough support to boost the SMB business.
Currently, Intuit has a Zacks #3 Rank, implying a Hold rating in the short-term (1-3 months).