Intuit Inc.'s stronger-than-expected performance in the latest quarter has pumped up the company's stock and raised expectations for the next fiscal year.
Led by its small-business and Internet products, Intuit on Tuesday reported net loss of $8.2 million, or 4 cents per share, for the quarter that ended July 31, the fourth of its fiscal year. That is 5 cents better than analysts' estimates and half the net loss for the same period a year earlier.
On Wednesday the Mountain View, Calif., company announced a revenue growth target of 22% for next year, up from 16% in fiscal 2000. In operations income, it is aiming for growth of 30% or more, up from 13%. It also plans to make $65 million in interest income from its current cash balances.
"We've entered 2001 with a solid game plan for delivering even stronger results," said Steven Bennett, president and chief executive officer of Intuit.
In reaction to Mr. Bennett's comments and the company's robust targets for 2001, Intuit's stock rose 8.5625% Wednesday, to $54.625. The stock was trading at $54.5625 midday Friday.
Though strong earnings usually bode well for stock performance, the market excitement about Intuit also had to do with "the fact that management raised the bar for fiscal 2001," said Caren Mayer, a managing director at Banc of America Securities in San Francisco.
This past fiscal year Intuit's revenue from Internet products grew 108% from the previous year, to $294 million. The growth was generated by three of its products: an electronic tax application, Quicken financial management software, and QuickBook Internet Gateway, a small-business management application.
"Three out of eight of its Internet businesses are profitable, and the market wants to pay for profitable Internet businesses," Ms. Mayer said.
Intuit also announced strategic alliances Wednesday with Stamps.com, GetConnected.com, and NetBank Inc.
Glenn Greene, vice president and senior analyst at ABN Amro, said Intuit is allowing other companies to tap into their customer base as possible revenue-sharing opportunities.
The company plans to integrate Stamps.com's Internet Postage service into next year's versions of Quicken Basic, Quicken Deluxe, and Quicken Home and Business. Intuit's small-business and personal customers will also be able to print U.S. Postal Service-approved postage and use it for mailings from their Quicken address book information.
Intuit has also partnered with GetConnected.com to give Intuit customers a one-stop shop for connectivity services, including Internet access, wireless service, long-distance and local phone service, calling cards, and satellite and cable television programming, through Quicken 2001 desktop software or through Intuit's Web site.
The third partnership is with NetBank, the Atlanta Internet-only bank. Quicken 2001 software, which was shipped Wednesday, automatically puts a NetBank icon on the desktop of customers' computers, which provides a link to the bank's new account application. Customers who open checking accounts through the promotion get an extra $50 placed in them.
Quicken users who have Internet connections and a NetBank account can also receive updated account information and transfer funds through Quicken without using an Internet browser.
Ms. Mayer said Intuit "has already Web-enabled their products, and they are beginning to integrate other products for their customers, who are already pretty loyal.".
According to analysts, the company also benefited from the demise of Microsoft's TurboTax software, which gives Intuit 70% of the tax planning software market and leaves only one major competitor, H & R Block.
Nearly 25% of federal tax forms were prepared on Intuit software this year, the company said.
Intuit's fiscal 2000 revenue increased 16% from last year, to $1.1 billion. The company ended the year with $1.5 million of cash and short-term investment assets, or approximately $7 per share.
"An arsenal of cash and securities on the balance sheet gives them a lot of potential to invest in growth and to keep as dry powder," Ms. Mayer said.
Fourth-quarter revenue declined 3.6% from a year earlier, to $162.3 million. The decline, which had been anticipated by analysts and Intuit, was caused in part by the closing of 22 branches as part of its acquisition of Rock Financial, lower international revenue, and a slowdown in sales of its Quicken and QuickBook products early in the year.
"We've raised the bar and set higher internal performance expectations," Mr. Bennett said, "and we've increased management accountability and are challenging the status quo throughout the company."
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