H&R Block reported that its fiscal 2008 revenues rose 10 percent to $4.4 billion, thanks to growth in its tax services business and the sale of its troubled Option One mortgage unit.
The company reported its first profitable quarter since 2006. Fourth-quarter net income was $543.6 million, or $1.66 per share, compared to a consolidated net loss of $85.6 million, or $0.26 per share in the fourth quarter of fiscal 2007.
Fiscal 2008 earnings from continuing operations grew 21 percent to $454.5 million, or $1.39 per share, compared to $374.3 million, or $1.15 per share for the prior year.
Full-year fiscal 2008 revenue in the tax services segment was $3.0 billion, an 11.3 percent increase over the prior year. Pretax income grew 11.4 percent to $785.8 million.
H&R Block achieved a 4.3 percent increase in net average retail tax preparation fees per client.
"During fiscal 2008, H&R Block served the tax needs of 23.5 million clients, the highest level in our history," said H&R Block chairman Richard C. Breeden (pictured) in a statement.
He also credited significantly improved margins at the company's RSM McGladrey unit.
RSM McGladrey reported fiscal 2008 revenues of $941.7 million, and a 54 percent increase in pretax income to $88.8 million. Revenues for McGladrey's tax and consulting practices grew by 8 percent and 13 percent, respectively.
On Friday, New York Attorney General Andrew Cuomo announced a settlement with H&R Block to end deceptive advertising practices that Block used in a sweepstakes contest to promote its tax business.
Under the agreement, Block must pay $245,000 in penalties and costs, and clearly post contest rules and regulations at participating H&R Block retail offices to enable non-purchasers to obtain information for entry into contests.
"H&R Block has agreed to implement the necessary changes so that all future promotions are in full compliance with New York State law," said Cuomo.
