By Chibuike Oguh
NEW YORK (Reuters) – Shares of H&R Block Inc rose nearly 12% to a six-month high on Wednesday after the U.S. tax preparation firm reported better-than-expected fourth-quarter results owing to lower operating expenses.
H&R Block’s revenue from virtual and in-person tax preparation services were little changed at $1.03 billion in the fourth quarter but its operating expenses fell 11% to $655.6 million.
That allowed net income to rise nearly 36% to $302.3 million and adjusted earnings per share to reach $2.05, the firm reported after the market closed on Tuesday. It also announced a 10% rise in quarterly dividend to 32 cents per share.
Wall Street analysts had expected earnings per share of $1.88, per Refinitiv data.
H&R Block’s shares were last up 10% to $39.01, after rising as high as $39.52, their highest level since February this year. With Wednesday’s gains, the stock has gained nearly 7% year-to-date.
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The median analyst target price on H&R Block is $42, according to Refinitiv data. Barrington Research raised its price target on the stock to $44 from $42 following the results.
H&R Block is one of the largest players in the $12 billion U.S. tax preparation industry, which is currently dominated by Intuit Inc’s Turbo Tax.
(Reporting by Chibuike Oguh in New York; editing by Diane Craft)