Earnings from tax services dropped to $266 million for fiscal 2012, down from $406.1 million the prior year. Revenue fell to $2.86 billion, off from $2.91 billion for fiscal 2011. With the company reporting results from continuing operations after its sale of RMS McGladrey, the tax services operations represented substantially all of the results reported by the Kansas City, Mo.-based tax chain. However, the company says the number of returns prepared via its network rose by 4 percent over the prior year while the total reported by the Internal Revenue Service was up only 2 percent. Block estimates it gained 30 basis points of total U.S. market share, including 75 basis points of share in the do-it-yourself category and 10 basis points of share in the assisted category
The company also opened offices in India recently, which is the fourth country in which it is operating outside of the United States.
In an earnings conference call, Cobb continued to picture rival Intuit as facing increasing pressure to find growth as the number of manually prepared returns decline dramatically, the source of many of the gains that company has made. Cobb said Intuit's decision to offer professional advice to taxpayers during the 2012 tax season underscores the kind of advice that Block has known that its customers need.