Mortgage crisis chips away at H&R Block

The tax-services giant reported a first-quarter net loss of $302.86 million, or $0.93 per share.
AUG 30, 2007
By  Bloomberg
H&R Block Inc., the provider of tax and accounting services, reported a first-quarter consolidated net loss of $302.86 million, or $0.93 per share. A year ago, the loss was $131.4 million, or $0.41. H&R Block’s revenue from continuing operations rose 11%, reaching $381.2 million. The firm also narrowed its outlook for fiscal 2008, predicting an earnings range of $1.30 to $1.45 per share, compared to the prior projection of $1.25 to $1.45 per share. Mortgage problems plagued the Kansas City, Mo.-based tax preparer during the quarter. Losses include a $49.6 million impairment of residual interests, a $57.4 loss on sale and $157.3 million in loan loss and repurchase preserves. Option One Mortgage Corp., which sells loans for H&R Block, tightened its underwriting criteria and cut back on loan commitment activity. Cerberus Capital Management L.P. is slated to buy the discontinued mortgage unit, but a number of closing requirements stand in the way—including one that calls for H&R Block to have $2 billion in loans funded within 60 days of the closing and the ability to warehouse at least $8 billion in loans. The company is trying to waive these requirements to speed up the purchase.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.