Intuit is off to a strong start for fiscal 2002, said Steve Bennett, Intuit’s president and chief executive officer. We exceeded pro forma consensus per share estimates by two cents. Revenue grew 11 percent and we’re on track to grow revenue faster this year than we did last year. As a result of the solid quarter and our confidence in the fundamentals driving our growth, we’re raising our guidance for pro forma operating income for fiscal 2002 by $5 million to the $280 million to $290 million range, or growth of 27 percent to 32 percent over fiscal 2001.
Intuit reported revenue of $208.8 million for the first quarter, an increase of 11 percent over the year-earlier quarter.
On a GAAP basis (see Table A), Intuit reported a net loss for the quarter of $92.4 million, or a loss of $0.44 per share. Intuit typically reports a loss in its first fiscal quarter each year, when revenue from tax preparation businesses is minimal, but operating expenses to develop new products and services continue at relatively consistent levels. In the year-ago quarter, Intuit reported a net loss of $33.8 million, or a loss of $0.16 per share. Compared with the year-ago period, per share results for the current quarter reflected an additional $35.4 million, pre-tax, in combined charges and net losses related to write-downs of marketable securities and other investments, and impairment charges relating to assets received in connection with the prior sale of the company’s online bill management business.
On the same pro forma basis Intuit has consistently followed for a number of years (explained below), the company reported a first-quarter net loss of $27.6 million, or a loss of $0.13 per share, $0.02 better than consensus estimates. Intuit had a pro forma net loss of $21.4 million, or a loss of $0.10 per share, for the first quarter of fiscal 2001. First-quarter 2002 loss per share increased from the prior year primarily due to lower interest income from declining interest rates and higher planned marketing and sales expenses to aggressively promote products and services during the peak selling season. (See Table B.)
Intuit continues to see service revenue grow as a percentage of total revenue. Service businesses accounted for 37 percent of total revenue in the first quarter of fiscal 2002 versus 25 percent for the year earlier period.
Intuit’s two large service businesses – Quicken Loans and payroll – both had strong results for the quarter:
Quicken Loans revenue grew 136 percent to $40 million. The number of closed loans increased 118 percent over the year ago period, resulting in $1.2 billion in processed loans for the quarter. Intuit expects year-over-year revenue growth for Quicken Loans to be lower in the third and fourth quarters, though it continues to expect strong performance on a total year basis.
Revenue from Intuit’s total payroll business increased 43 percent to $34 million.
Revenue from the Basic payroll product increased 64 percent over the prior year period. Deluxe payroll revenue increased 52 percent and Premier payroll revenue increased 10 percent. Intuit expects the year-over-year revenue growth rate for its payroll business to be lower in the third and fourth quarters, though it continues to expect solid performance on a total year basis. The company expects to grow pro forma operating profits from its payroll business faster than revenue growth in fiscal 2002 as the business benefits from operational rigor and process improvements.
