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Caturano Lifted RSM McGladrey Revs

RSM McGladrey logoAlthough RSM McGladrey reported a 4-percent drop in revenue for the third quarter ended January 31, the firm's purchase of Caturano last year boosted tax services revenue by 5.4 percent. Meanwhile, cost-cutting helped McGladrey post an operating profit of $8.59 million, a rebound from a loss of $11.2 million in last year's corresponding period.

Those numbers were reported by the unit's parent, H&R Block this week. Revenue for the most recently ended quarter was $171.3 million, down from $178.5 million a year ago. The Caturano deal was largely responsible for the increase in revenue to $84.1 million from $79.7 million a year earlier.

Among the segments in which revenue dropped was business consulting, which reported just over $60 million in income for the third quarter, a decline of 14.9 percent from $70.5 million. Also showing a decline was accounting services with $9.1 million in revenue, off 22 percent from the prior year's $11.7 million.

In its SEC filings, Block noted that for the nine months it had a drop of $10.3 million in its Other Revenue category, down 23.7 percent from the first three quarters of fiscal 2010. The decrease stemmed primarily from a reduction in management fees received under Block's new administrative services agreement with McGladrey & Pullen. That agreement stemmed from McGladrey's move to sever the relationship, which led to the new agreement..

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