H&R Block (HRB) to Report Q1 Earnings: What's in the Cards?

H&R Block, Inc. HRB is scheduled to report first-quarter fiscal 2019 results earnings on Aug 28, after market close.

The company’s shares have declined 11.5% in a year’s time, against the industry’s rise of 6.5%. H&R Block has an impressive surprise history. The company beat estimates in each of the trailing four quarters, the average being 5.1%.

Let’s see how things are shaping up for the announcement.

Seasonality to Affect the Top and the Bottom Line

The Zacks Consensus Estimate is pegged at a loss of 79 cents, which indicates year-over-year decline of 27.4%. For revenues, the consensus mark is pegged at $136 million, indicating year-over-year decline of 1.4%. The company is currently making changes in pricing structure in its assisted business and that is expected to weigh on its results through 2018. Moreover, increased strategic investments in technology and operations are likely to dent the company’s bottom-line growth.

Further, seasonality might have a higher negative impact in the to-be-reported than the year-ago quarter. The company makes majority of its revenues and earns profit in the fourth quarter of the fiscal year as most of its clients file their tax returns from January through April. Revenues stay significantly down and the company incurs loss in first three quarters of fiscal year.

H&R Block, Inc. Price and EPS Surprise

H&R Block, Inc. Price and EPS Surprise | H&R Block, Inc. Quote

 

Our Model Does Not Suggest a Beat

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

H&R Block has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that decreases the chances of an earnings beat.

Stocks to Consider

Investors interested in the broader Business Services Sector may check out the following companies with the right combination of elements to beat estimates in the next releases:

NV5 Global, Inc. NVEE has an Earnings ESP of +2.22% and a Zacks Rank #2. The company is expected to release third-quarter 2018 results on Nov 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alliance Data Systems Corporation ADS has an Earnings ESP of +2.38% and a Zacks Rank #3. The company is expected to release third-quarter 2018 results on Oct 18.

Accenture plc ACN has an Earnings ESP of +0.20% and a Zacks Rank #3. The company is expected to release fourth-quarter fiscal 2018 results on Sep 27.

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