BusinessCompany NewsSub-prime takes toll on H&R Block results

Sub-prime takes toll on H&R Block results

H&R Block has reported massive net losses of half a billion US dollars for the October quarter as a result of the sub-prime crisis

H
&R Block
, USA’s biggest tax accountancy firm, has reported a net loss of
$US502.3m (?246.4m) for the quarter ended October 31, stemming from its exposure
to the sub-prime crisis through the discontinued operations of its sub-prime
mortgage business, Option One
Mortgage Corp
.

The firm said almost all of the wider loss reflected results in its
discontinued sub-prime mortgage business. The net loss from discontinued
operations was $US366.2m, for the fiscal 2008 second quarter, versus a loss of
$35.5m for the previous corresponding period.

Continuing operations posted a net loss of $US136.1m, versus a loss of
$US121m in the year-ago quarter. The company normally reports an operating loss
for its fiscal first and second quarters because of the seasonality in tax
services and business services.

Revenues from continuing operations were up 10%, to $US434.8m, reflecting
increased revenues in all three of the company’s continuing business segments.
But the higher revenues were more than offset by higher operating costs.

Further reading:

Change of guards at H&R Block

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