H&R Block (HRB) beat the Street Thursday by narrowing its third-quarter losses thanks to shrinking expenses and growing revenue at its tax business.

Shares of the tax preparer climbed almost 3% in response to the stronger-than-expected results.

Kansas City-based H&R Block said it lost $105.2 million, or 39 cents a share, last quarter, compared with a loss of $141.7 million, or 47 cents a share, a year earlier.

Excluding one-time items, the company lost 37 cents a share, besting forecasts from analysts for a loss of 40 cents.

Revenue rose 6.3% to $137.3 million, topping the Street’s view of $130.4 million.

"I'm very pleased with the improvement in our second quarter results, which reflect savings from our cost reduction initiatives and a strong tax season in Australia," CEO Bill Cobb said in a statement. "The U.S. tax season is right around the corner and we believe we're on pace to deliver significant earnings and margin expansion in fiscal 2013."

H&R Block said its overhead expenses dropped by 13% and its compensation and benefits expenses slid 11%.

The company said it remains on pace to deliver $85 million to $100 million of pretax earnings from cost reduction initiatives in fiscal 2013.

H&R Block’s tax-services revenue rose 7% to $130 million, thanks to an 8% jump in tax returns prepared in Australia. The business’s pretax loss improved by 25% to $130 million.

Shares of H&R Block rose 2.76% to $17.85 in recent trading Thursday morning, leaving them up almost 9% on the year.

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