H And R Block Troubles Presents Investor Opportunities

In just the last month, H and R Block shares dropped a whopping 21% following an unsatisfactory third quarter that led to investors fleeing to save themselves. On the other hand, it is believed that the fourth quarter could turn everything around and H and R Block stock can provide incredible investment opportunities for investors with a keen eye.

While the third quarter generally performs lower than other quarters every year, this year's loss was much more than ever anticipated. Its revenue dropped below the expected $502 million to approximately $475 million. That is a $79 million loss, which is far greater than the $37 million loss in 2015, during the same quarter. If that's not enough, the company also demonstrated four consecutive years of decreased volume, which worried its stockholders.

So the question is, is this an income opportunity for a savvy investor? We believe it may be. As disposable income increases this tax season, the public feels there is less urgency to complete their tax returns early. As a result, the possibility remains that the fourth-quarter earnings may be much higher than expected. The potential that exists for greater than anticipated earnings makes H and R Block stock attractive in this particular quarter.

Lower Than Expected H&R Block Earnings

Taxpayers aren't rushing to file their taxes early this year, and it's impacting H&R Block earnings.  It was announced that the company had huge fourth quarter losses because taxpayers are waiting later to file taxes.  H&R Block earnings are lower in other countries too.

Usually, H&R Block has losses for quarters that are outside of the regular season.  But the most recent losses were higher during the tax season, and this isn't what Wall Street anticipated.  Thus, the company shares dropped by 5.1 percent, which resulted $31.22 per share.  This is 2.5 percent lower than last year.  H&R Blocks also reported that they had 6 percent fewer U.S. tax returns during the first three quarters of  the year.

According to H&R Block, these loses were attributed to ongoing fraud and late tax filing.  When taxpayers file late, it takes longer for the company to process their returns.  The company also stated that the federal government as well as state governments were trying to find a way to combat growing instances of tax fraud.  Hopefully, this will result in changes within the tax industry.

H&R Block earnings had a loss of $81.7 million for the quarter.  This is equivalent to 35 cents per share.  The loss was just $36.9 million during the previous year.  This equates to 34 cents a share, and sales went up by 6.8 percent to $475 million.

Tax Group To Sponsor Lottery In Future Television Ads

This may help pay taxes but this helps beat the Axis. Stay on the job. - NARA - 534946 (Photo credit: Wikipedia)

The last massive Powerball Jackpot left many people disappointed. However, these people shouldn't worry much because H&R Block is giving the public another chance to win some cash. One-thousand individuals will have the chance to win $1000 in the H&R Block Giveaway. The drawing starts Saturday, and it will continue to run for 32 consecutive days. The entrance fee for this remarkable lottery is currently $32 per person.

Kathy Collins, the Chief Marketing Officer for H&R block is pushing this lottery to encourage early filing. Those who file their taxes in a timely manner will have a better chance of being one of the lucky winners. H&R block prepared taxes for 24 million individuals worldwide in 2014. They also gave people an incentive to save by offering 50% discounts. By combining this lottery with their other promotions, they hope to prepare even more taxes in 2016.

They are using television ads and social media platforms to promote this lottery. Two 30-second television ads are presently running at key periods throughout the day. H&R Block is also using television ads to promote their do-it-yourself filing option. For $9.99, individuals can file their own federal taxes through the company's interface.

Promoting the H&R block Giveaway inspires the team because they get to assist individuals in two ways. Not only will they try to get the maximum return for their clients, they also give them a chance to win $1000. According to Mrs Collins, they spent about the same on advertising as they spent in the previous year. Despite the cost, she still seems content with the current direction and success of the company.