Kansas City, Mo. (May 3, 2004) -- Based on its preliminary results through April 15, H&R Block Inc. said that fees from tax preparation and related services rose 4.8 percent to $2.2 billion.

However, total clients served fell 0.9 percent to 18.8 million in the 2004 tax season. Clients served by the company's digital tax solutions business increased 11.1 percent, while clients served in all retail tax offices dropped 3.1 percent to 15.6 million. Block's average fee per client served jumped 8.1 percent to $139.96.

Block chairman and chief executive Mark A. Ernst, who called the decline in office clients served "disappointing," said that the firm would share conclusions from an in-depth analysis of the tax season when the company announces fourth quarter and year-end financial results on June 9.

Block said that it expected earnings to increase more than 20 percent for the fiscal year ending April 30, at the high end of -- and possibly above -- its earnings-per-share guidance range of $3.65 to $3.85. Ernst attributed the anticipated growth to strong earnings from offices in former major franchise territories, cost management in the U.S. tax segment, and solid performance in both the digital tax solutions business and mortgage segment.

-- WebCPA staff

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