Intuit Inc. (INTU) recently released the second update for its fiscal year 2011 consumer tax offerings.

Intuit stated that TurboTax federal units grew 23% year over year from February 13 to March 12. TurboTax products and services from Intuit are designed to enable individuals and small business owners to prepare and file their own federal and state personal and small business income tax returns quickly and accurately.

Management stated that the company continues to see strong momentum since February as TurboTax Online unit reported a 30% year-over-year growth. The pace of filing tax returns increased with the financial year 2011 nearing its end.

Intuit will issue a third and final tax season update in April at the end of the tax season.

In addition, Intuit reiterated its guidance for fiscal 2011 Consumer Tax revenue and total revenue. Intuit expects revenue to grow around 10% – 13% from the Consumer Tax segment. Revenues for fiscal 2011 are expected to grow around 8% – 11%.

Last month, Intuit reported second quarter 2011 adjusted earnings per share (EPS) of 25 cents, missing the Zacks Consensus Estimate of 27 cents. The adjusted EPS excludes amortization of acquired technology and intangible assets and tax adjustments, but includes stock-based compensation expenses.

Intuit reported revenues of $878.0 million in the second quarter, up 4.9% from $837.0 million in the prior-year quarter. The quarter’s results missed management’s guidance range of $920.0 – $940.0 million and the Zacks Consensus Estimate of $896.0 million. A roughly $60.0 million shift in tax revenue to the third quarter was responsible for the quarter’s miss.

Consumer Tax witnessed a year-over-year shortfall of 6.0% in revenues, due to the shift in revenue from this quarter to the third. The shift was mainly due to late filings of tax returns.

Intuit is a leading provider of business and financial management solutions to small and medium-sized businesses, consumers, accounting professionals and financial institutions.

Management is confident about gaining market share in its Small Business group and Consumer Tax business, aided by accelerating customer growth and improving revenue per customer. However, we remain cautious on the stock based on the third quarter miss and stiff competition from H&R Block  Inc. (HRB).

Current, Intuit has a Zacks #3 Rank indicating a short-term Hold rating.

 
BLOCK H & R (HRB): Free Stock Analysis Report
 
INTUIT INC (INTU): Free Stock Analysis Report
 
Zacks Investment Research