Source: HRB Tax Group, Inc.
Jeff Jones, CEO, H&R Block
Despite H&R Block reporting a loss in its most recent quarter Wednesday, shares of the tax preparer rallied 10 percent in midday trading after the CEO’s comments about the GOP tax reform bill.
“No matter what alterations were ultimately made [to the bill], I’m convinced the value of H&R Block remains our ability to help,” chief executive Jeffrey Jones said on a conference call with investors.
H&R Block weathered a second quarter where which saw losses in EPS along with revenue reach 74 cents per share along with $153 million, respectively. While the EPS results were 4 cents above what Wall Street expected, H&R Block stock was trading lower in premarket. which changed when Jones got on the conference call.
“alterations to the tax code are nothing brand new,” Jones said. “Since our founding in 1955, there have been 33 significant alterations.”
He cautioned which the outcome of the tax legislation overhaul is usually difficult to predict, saying H&R Block is usually “monitoring these developments very closely.” Then Jones’ tone shifted, saying H&R Block’s 80,000 tax preparers will help Americans “understand what the brand new tax law means for them.”
“The proposed 14-line postcard tax return includes refundable credits, something we know taxpayers want help with,” Jones said.
The H&R Block boss also emphasized how a lower corporate tax rate might boost the company’s cash flow along with bottom line. Jones says the U.S.-based company includes a historical tax rate inside mid 30 percent, meaning the brand new reform might be a boon.
“We’re excited about the upcoming tax season,” Jones added, before handing off the call to CFO Tony Bowen.
Before Wednesday, the stock was down more than 14 percent coming from highs reached in August as investors worried the simplified tax plan might hurt business.