CNET también está disponible en español.

Ir a español

Don't show this again

HolidayBuyer's Guide
Tech Industry

Intuit beats expectations

Strong sales of its Turbo Tax software boost the company's second-quarter profits.

Intuit, the largest maker of personal-finance software, reported better-than-expected fiscal second-quarter earnings, buoyed by sales of its Turbo Tax software.

Intuit said its profit from operations was $84.8 million, or $1.34 a share, compared with $47 million, or 95 cents per share, in the year-earlier period. Per-share earnings beat the average estimate of Wall Street analysts by four cents a share, according to First Call>

Revenue rose 46 percent to $346 million from $237.5 million.

"We continue to see solid growth and momentum in small business software and services, and our Internet business is growing strongly," said Mark Goines, senior vice president of Intuit's consumer unit. "And we're having a record year in our tax enterprise."

Intuit shares closed unchanged today at 89.5625. The earnings report was released after the close of regular U.S. trading.

Intuit shares have risen 85 percent over the last year as investors have seized upon its strategy of trying to obtain more revenue from online advertising and Internet transactions. Goines said Intuit has booked about $60 million in ad revenue for its Web site. For the quarter, the company got 10 percent of its revenue from the Net, up from 8 percent in the last fiscal year.

"The stock is going to be made or broken based on the Internet part of the business,'' said Gary Craft, an analyst at BancBoston Robertson Stephens. He rates the stock "buy."

Earlier today, Intuit filed with the Securities and Exchange Commission to sell its entire interest in Excite, which is being acquired by @Home .

Goines said Intuit has sold 450,000 shares of Excite at 94 but still owns 4.35 million shares. The shares were acquired at 6.75 per share, so Intuit could book a gain of $550 million if it sells its entire holding. Additional sales are planned, he added.

Raymond Stern, senior vice president for strategy, finance and administration, said the money could be used to invest in other companies or for acquisitions.

"We believe strongly that as we pursue all our over all strategies that mergers and acquisitions will be a significant component of that," Stern said.

Intuit has promised investors it will improve its operating margin by one to 1.5 percentage points per year. Stern said the company did that last year and is on track to do the same this fiscal year.

Part of Intuit's higher revenue can be attributed to earlier releases of products it updates each year, including its flagship Quicken personal finance software and its tax preparation offerings.

On its Quicken.com Web site, Intuit has launched an online payroll service for small businesses, and it also lets visitors apply for mortgages and some kinds of insurance online. Some $60 million in mortgages originated on Intuit were closed in the quarter.

In the last 10 days of January, the company filed 100,000 tax returns for users; since then, more than 1 million have been filed electronically through Intuit. Page views in January were 164 million, up 270 percent over January 1998.

Bloomberg contributed to this report.