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Intuit Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 29, 2012 02:26PM

Intuit Inc. (INTU) filed Quarterly Report for the period ended 2012-01-31. Intuit Inc has a market cap of $17.26 billion; its shares were traded at around $57.61 with a P/E ratio of 24.7 and P/S ratio of 4.5. The dividend yield of Intuit Inc stocks is 1%. Intuit Inc had an annual average earning growth of 15.6% over the past 10 years. GuruFocus rated Intuit Inc the business predictability rank of 4-star.



Highlight of Business Operations:

Total net revenue for the first six months of fiscal 2012 was $1.6 billion, an increase of 14% compared with the same period of fiscal 2011. Our Consumer Tax segment and our Our Small Business Group were the key drivers of revenue growth in the first half of fiscal 2012. Revenue in our Consumer Tax segment increased 43% compared with the same period a year ago due to 39% growth in TurboTax Online federal units. These results include the impact of last year's delay in the Internal Revenue Service's acceptance of certain electronically filed tax returns, which contributed to a shift in Consumer Tax revenue from the second quarter of fiscal 2011 to the third quarter of fiscal 2011. Revenue in our Small Business Group grew 11% compared with the same period a year ago due to growth in connected services offerings and improved offering mix. Operating income increased to $98 million in the first six months of fiscal 2012 from $7 million in the same period of fiscal 2011 due to higher revenue partially offset by higher costs and expenses, including higher spending for staffing expenses and share-based compensation expenses. Net income increased to $54 million in the first six months of fiscal 2012 from $3 million in the same period of fiscal 2011. Our effective tax rate for the first half of fiscal 2012 was approximately 33%. Including certain discrete tax benefits, we recorded a tax benefit of $12 million on a pre-tax loss of $9 million in the first half of fiscal 2011. Diluted net income per share for the first six months of fiscal 2012 increased to $0.18 from $0.01 in the same period of fiscal 2011 as a result of the higher net income and the decline in weighted average diluted common shares compared with the same period of fiscal 2011.

Total net revenue increased $203 million or 14% in the first six months of fiscal 2012 compared with the same period of fiscal 2011. In our Small Business Group, revenue was up 11%. Financial Management Solutions segment revenue increased 7% due to growth in QuickBooks Online and QuickBooks Enterprise revenue. Employee Management Solutions segment revenue increased 11% due to favorable offering mix, improved customer adoption of payroll direct deposit services, and price increases for desktop payroll customers. Payment Solutions segment revenue increased 18% due to fee structure changes and growth in the merchant customer base. In our Consumer Tax segment, revenue increased 43% due to 39% growth in TurboTax Online federal units. These results include the impact of last year's delay in the Internal Revenue Service's acceptance of certain electronically filed tax returns, which contributed to a shift in Consumer Tax revenue from the second quarter of fiscal 2011 to the third quarter of fiscal 2011. Accounting Professionals segment revenue grew 8% due to price increases in our professional tax business and higher QuickBooks Premier Accountant Edition and ProAdvisor Program revenue. Financial Services segment revenue increased 9% due to growth in mobile banking revenue and, to a lesser extent, to higher bill-pay revenue. Other Businesses segment revenue decreased 4% due to lower Quicken revenue partially offset by growth in global revenue.

FMS segment operating income as a percentage of related revenue increased to 34% in the second quarter of fiscal 2012 from 32% in the same quarter of fiscal 2011 and increased to 30% in the first six months of fiscal 2012 from 27% in the same period of fiscal 2011. Operating income increased in the first six months of fiscal 2012 due to the increase in revenue described above and about $14 million in lower expenses for advertising and other marketing programs, partially offset by about $10 million for higher staffing expenses.

EMS total net revenue increased $12 million or 9% in the second quarter of fiscal 2012 compared with the same quarter of fiscal 2011 and increased $26 million or 11% in the first six months of fiscal 2012 compared with the same period of fiscal 2011. Revenue was higher in the fiscal 2012 periods due to more customers choosing our Enhanced desktop payroll and online payroll solutions, improved customer adoption of payroll direct deposit services, and price increases for desktop payroll customers. At January 31, 2012, total payroll customers were up 2% while online payroll customers were up 22% compared with January 31, 2011.

Total operating expenses as a percentage of total net revenue decreased to 70% in the first six months of fiscal 2012 from 75% in the same period of fiscal 2011. Revenue grew $203 million while total operating expenses increased $69 million in the fiscal 2012 period. Total operating expenses increased about $51 million for higher staffing expenses and about $10 million for higher share-based compensation expense. Share-based compensation expense increased because the market price of our

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