H&R Block Inc. unveiled a $3.5 billion stock-buyback program after the tax-preparation company's deal to divest its bank business closed a month earlier than expected.
Shares rose 7.7% to $35.50 in recent after-hours trading as the company also posted a smaller per-share loss than analysts had feared and revenue beat expectations.
Continue Reading Below
The company said the stock repurchase program includes its plans for a modified Dutch auction to buy as much as $1.5 billion of its common stock, or roughly 16% of its market capitalization as of Aug. 31, for between $32.25 and $37 a share.
Regulators last month approved the deal to sell the bank business to a unit of Bofl Holding Inc., which initially was reached in April 2014. As a result, H&R Block no longer will be regulated as a savings-and-loan holding company and won't be required to maintain the higher capital levels that come with the designation. H&R Block management previously estimated that after the deal closed, the company could have excess capital of as much as $1 billion.
H&R Block said the shedding of its bank unit concludes a multiyear effort to refocus on its core tax business.
For the period ended July 31, H&R Block reported a loss of $99.7 million, or 36 cents a share, compared with a year-earlier loss of $116.2 million, or 42 cents a share. The per-share loss from continuing operations was 35 cents, compared with a year-earlier loss from continuing operations of 40 cents. Revenue increased 3.1% to $137.7 million.
Analysts polled by Thomson Reuters expected a per-share loss of 40 cents and revenue of $136 million.
(By Tess Stynes)