H&R Block Inc.’s loss widened by 7 percent in its fiscal first quarter, as the tax preparer booked higher operating expenses and other costs, offsetting a sharp rise in revenue.
The company, based in Kansas City, Mo., typically reports an operating loss in the May-July quarter, which follows the peak U.S. tax-filing season.
In a conference call with Wall Street analysts on Tuesday, management said the company had asked its regulator over the past 12 months for permission to buy back shares, but has not received approval to do so.
Block’s shares slid almost 4 percent in after-market trading.
The nation’s largest tax prep company said that it benefited in the latest quarter from growth in tax services revenue, primarily due to business from international customers. Growth in revenue from products and interest income helped drive overall revenue 32 percent higher in the quarter.
But those gains were offset by operating expenses, which grew 14 percent due to higher variable costs, foreign exchange currency losses, higher legal fees and costs related to the company’s divestiture of its banking unit.
Block agreed in July to sell its H&R Block Bank assets to Republic Bank and Trust Co. After the deal is complete, H&R Block Bank will close by surrendering its charter.
Republic has an application filed with regulators to convert into a national bank, but doesn’t anticipate it will receive a decision before the end of this month.
As a result, Block said it expects to continue offering financial services through H&R Block Bank in the upcoming tax season.
H&R Block reported Tuesday that it recorded a loss of $115.2 million, or 42 cents per share, for the quarter ended July 31. That compares with a loss of $107.4 million, or 39 cents per share, last year.
Excluding the impact of fees related to the proposed sale of its banking arm, Block’s adjusted loss amounted to 40 cents per share, the company said.
Analysts polled by FactSet, on average, anticipated an adjusted loss of 37 cents per share.
Revenue increased 32 percent to $127.2 million, from $96.5 million.
Analysts had forecast $100 million in revenue.
Shares in H&R Block ended regular trading down 3 cents at $27.88. The stock fell 98 cents, to $26.90, in after-market trading.