KANSAS CITY, Mo. - H&R Block Inc., the nation's largest tax preparer, delayed release of its second-quarter earnings report yesterday to give its new auditors time to review the numbers.
But it said it expected a much larger loss as the company's mortgage business continues to drag it down.
A preliminary report said H&R Block expected a net loss of $502.3 million, or $1.55 a share, for the quarter ended Oct. 31, compared with a loss of $156.5 million, or 49 cents a share, for the same period a year earlier.
Of that loss, $366.2 million, or $1.13 a share, came from discontinued operations, including much of its Option One Mortgage Corp., which has suffered as an increase in borrower defaults and the drying up of credit markets have caused dozens of lenders to disappear.
H&R Block said losses from continuing operations would amount to $136.1 million, or 42 cents a share. Analysts had expected a loss of 35 cents a share on continuing operations.
Shares lost 65 cents, or 3.26 percent, to close at $19.30 in trading yesterday.
H&R Block typically has a loss in its second quarter, as it makes most of its revenue and earnings during the January-to-April tax-filing season. Revenue during the quarter rose 10 percent, from $396.1 million to $434.6 million, missing analysts' expectations of $463 million.
The company said discontinued operations had a pretax loss of $551.2 million, including $367 million in operating losses and losses on sales of mortgage assets, $123 million to adjust the value of remaining mortgage-origination and servicing assets, and $61 million in costs for restructuring Option One's loan-origination operations.