Slow mortgage market hurts H&R

Article Excerpt

H&R BLOCK INC. $23 (New York symbol HRB; Conservative Growth Portfolio, Finance sector; WSSF Rating: Above average) lost $0.49 a share in its second fiscal quarter ended October 31, 2006, compared with a loss of $0.25 a year earlier. The company makes most of its money in the six months leading up to the April income tax deadline, and typically loses money the rest of the year. Revenue fell 6.9%, to $563.2 million from $605.0 million. The company blamed the higher loss on problems with its Option One mortgage business, which supplies 10% of its revenue. This operation focuses on borrowers who fail to qualify for loans at regular banks. Consequently, rising interest rates and the slowdown in the housing market forced H&R Block to increase its loss provisions in the quarter. The company is now considering selling this unit, which would let it focus on its more profitable tax, banking and accounting operations. H&R Block is a buy. buy…

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