In a not too surprising response, the shares of H&R Block dived on Friday after the tax preparation and software provider disclosed that it had missed their tax liabilities by – ah – just $32 million dollars.
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The maker of TaxCut software said they would have to restate their fiscal year 2004 and 2005 results along with their previous results for 2006.
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The new results will shrink Block’s fiscal year earnings by $0.02 per share and the same for 2004.
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Block accredited the decline to an after-tax charge of $31.7 million, or $0.10 per share, from a legal settlement and costs from it. Hmmm, I guess they forgot about that little item.
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The result is that now Block is looking to earn about $1.65 per share in fiscal 2006 rather than its original range of $1.90 to $2.15 a share.
The shares of Block fell a whopping $2.1 to $23.09 in response to the error.
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While this story is somewhat odd or amusing for the general bystander, Block could have a public relations nightmare on their hands.
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Laurence K. Zuckerman, CPA, tax practitioner who holds a master’s degree in taxation said that “Realistically, preparing corporate returns is an inherently more difficult and complicated task than preparing tax returns for individuals en masse.”
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Consumers can’t be looking at this in any positive light. You couple this with their recent problems with their technology in their offices last month which affected about a quarter of a million customers, and this is going to have some serious affect upon them for a while.
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Hello. Where’s management?
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