H&R Block benefits from tax complexity, fees up on fewer returns

H&R Block also saw increases for online tax products and its TaxCut software. Use of these products surged by more than 900,000 (21.1%), with online return preparation up an astounding 45.2%. The number of returns prepared with H&R Block's software solutions grew by 4.2%.

Business Services revenue fell 4.7% to $897.8 million, but pretax income was up 8.2% to $96.1 million. H&R Block's consumer finance division reported a pretax loss of $14.5 million -- down from a pretax gain of $11.5 million the year before. Nearly $64 million in loan loss provisions were recorded during the year, along with an $11.9 million real estate write-down. Mortgage loan interest income was off $28.5 million.

Richard C. Breeden, the company's chairman, says, "During the past year, H&R Block significantly improved earnings and profit margins despite the overall economy. We increased net worth by $418.0 million, or 42.3%. A positive swing of $1 billion moved us from a net debt position to a net cash balance sheet at the end of our fiscal year for the first time in four years."

Consolidated net income reached $485.7 million, a substantial change from the prior year's loss of $308.6 million.

And, thanks to plenty of complicated tax laws intended to stimulate the economy, H&R Block should look solid at this time next year.