Intuit forecasts robust annual profit; shares dip on weak consumer group outlook

Accounting software-maker Intuit on Thursday forecast fiscal 2024 profit above Wall Street estimates, but weak growth outlook for its business that caters to individuals dragged its shares nearly 2 per cent lower in aftermarket trading.

Small and medium sized businesses rely on companies like Intuit to assist them by managing their financial needs with speedy tax-preparation software.

The company forecast Consumer Group growth of 7 per cent to 8 per cent for the financial year ending July 2024.

“The Consumer Group guidance for FY24 is lighter than expected,” Morningstar analyst Julie Sharma said.

Intuit’s main products include QuickBooks, TurboTax, Credit Karma, and Mailchimp among others, that serve more than 100 million customers by managing a wide range of accounting services.

In the fourth quarter ended July 31, revenue at its personal finance portal Credit Karma, which the company acquired in 2020, fell 11 per cent to $424 million as rising interest rates hurt borrowings while revenue at its Consumer Group fell 12 per cent to $128 million.

“We were expecting slightly better Credit Karma results,” said Sharma, adding it appears that challenges regarding loans were worse than she expected.

The Mountain View, California-based company expects annual adjusted profit per share in the range of $16.17 to $16.47, above analysts’ average estimate of $15.95 per share, according to Refinitiv data.

The company expects annual revenue between $15.89 billion and $16.11 billion, compared with market estimate of $15.99 billion.

Intuit reported quarterly revenue of $2.71 billion for the quarter, beating expectations of $2.64 billion, according to Refinitiv data.

The company reported a quarterly profit per share of $1.65, above analysts average estimate of $1.44 per share.

Separately, the board approved a new $2.3 billion stock repurchase authorization, giving the company a total authorization of $3.8 billion.