12/11/2007盤前速遞：H&R Block 2Q Losses Soar

H&R Block 2Q Losses Soar

盤前期指強勁，Fed Release之前來一個關於這些天令人困擾話題的壞消息。
兵不厭詐！
今天要大漲！

http://biz.yahoo.com/ap/071211/earns_h_r_block.html

AP
H&R Block 2Q Losses Soar
Tuesday December 11, 8:37 am ET
By David Twiddy, AP Business Writer 
H&R Block 2Q Loss Soars on Mortgage Meltdown; Final Results Delayed Until Friday

KANSAS CITY, Mo. (AP) -- H&R Block Inc., the nation's largest tax preparer, said in a preliminary earnings report Tuesday that it expected a huge second-quarter loss as it continued to wrestle with its disintegrating mortgage arm.
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In a securities filing, the company said it was submitting its quarterly report late, citing a decision earlier this fall to change accounting firms. The company was scheduled to file late Monday.

But it said it expected a net loss of $502.3 million, or $1.55 per share, for the quarter ending Oct. 31, compared with a loss of $156.5 million, or 49 cents per share, during the same period a year ago.

Of that loss, $366.2 million, or $1.13 per share, came from discontinued operations, including much of its Option One Mortgage Corp., which has suffered as an increase in borrower defaults and as the drying up of credit markets has caused dozens of lenders to disappear.

Continuing operations lost $136.1 million, or 42 cents per share. Analysts had expected a loss of 35 cents per share on continuing operations.

Shares fell 6 percent, or $1.20, to $18.75 in premarket trading Tuesday.

H&R Block typically has a loss in its second quarter as it makes most of its revenue and earnings during the January-April tax filing season. Revenue during the quarter rose 10 percent from $396.1 million to $434.6 million, missing analysts' expectations of $463 million.

The company said its discontinued operations had a pretax loss of $551.2 million, including $367 million in operating losses and losses on sales of mortgage assets, $123 million to adjust the value of remaining mortgage origination and servicing assets and $61 million in costs for restructuring Option One's loan origination operations.

In a bid to reduce the company's mortgage exposure, H&R Block said it reduced more than $3 billion in mortgage loans to $113 million through sales and writedowns. It said it still had $86 million in reserves for potential losses from buying back underperforming loans.

"We continue to move resolutely to end our participation in the subprime mortgage business," Chairman Richard Breeden said in a news release. "While we incurred a painful loss in exiting these positions, we determined to take our lumps and move forward."

The proposed sale of Option One to Cerberus Capital Management LP failed last week and H&R Block said it was scrapping most of the business.

The company said it still expected annual earnings of between $1.30 and $1.45 per share, but said it now expected the number to be closer to the lower end of that range. Analysts expect annual earnings of $1.36.

The company said it expected to file its quarterly report by Friday. It said the delay came as it switched to auditing firm Deloitte & Touche LLP in October, shortly before the quarter ended and the firm needed more time to perform its work.

H&R Block changed auditors after the Breeden's election in September to the company's board of directors. Breeden is serving as a court-appointed monitor for KPMG, the company's previous auditor, and company officials worried that relationship would endanger the auditor's independence.

Breeden has since become chairman of the company, ousting former Chairman and Chief Executive Officer Mark Ernst. Alan Bennett is serving as interim CEO while the company searches for a permanent replacement.