Small banks are responding to the economic slowdown by purging inactive users of online banking, executives of Intuit Inc. said last week.

But the number of active users of its online banking software continues to grow, and the Mountain View, Calif., vendor said it still expects revenue in its financial institutions unit to grow 5% to 9% in the current fiscal year, which ends July 31, despite a general economic slump that may extend deep into next year.

Overall, the company reported results for its first fiscal quarter that beat Wall Street estimates, and though it reduced its outlook for the year ahead, one analyst hiked her rating on the stock.

Brad Smith, Intuit's president and chief executive, said on an earnings call Wednesday evening that the company has seen no slowdown in consumers' signing up for the company's hosted online banking service (developed by Digital Insight Corp., which Intuit bought in February 2007).

"What we did see was an increase in the number of banks going in and purging customers that they felt weren't actively using the products," Mr. Smith told analysts. He said he did not know whether the banks had completed their purges.

R. Neil Williams, a senior vice president at Intuit and its chief financial officer, reported that active online banking users grew 8% in the fiscal quarter that ended Oct. 31, compared to the year earlier, and bill-pay users grew 18%.

Seventy financial companies have been converted to FinanceWorks, its online financial management application, Mr. Williams said.

The economic slump also means fewer new users of Intuit's QuickBooks accounting software than executives had expected.

"This started as a consumer slowdown" rather than being led by a downturn in commercial business conditions, Mr. Smith said. "Small businesses often finance their … businesses with either credit cards, or home equity loans, or lines of credit. And we all know what the current credit conditions are in the market."

Intuit reported a decline in merchant transaction volume in its payroll and payment segment. Merchant acquisition remained strong at an 18% growth rate, he said, "but it's not strong enough to compensate for the lower than expected transaction volume per merchant." He said he does not foresee a rebound in the economy until the end of next year.

Intuit said that its quarterly loss widened by 151%, to $52.1 million, in the fiscal first quarter, compared to the year earlier. Revenue rose 8%, to $481 million.

Intuit typically posts a first-quarter loss because its tax business generates relatively little revenue during that part of the year.

A loss of 9 cents a share, excluding certain items, was less than the average analyst expectation of a 12-cent loss.

Intuit said it anticipates second-quarter earnings of 40 to 42 cents per share, below the average of Wall Street estimates, 46 cents. For the full 2009 fiscal year, the company reduced its projected earnings to $1.82 to $1.89 per share, from an earlier range of $1.86 to $1.90.

It also reduced revenue expectations to $3.26 billion to $3.38 billion, or growth of 6% to 10%, down from a previous 9% to 12% growth outlook.

"These are challenging times, but this is an environment in which we should be able to build our customer base and strengthen our franchises," Mr. Smith said. "Our products and services help customers save and make money."

Heather Bellini, an analyst at UBS AG, upgraded the stock by two notches Friday, to "buy" from "sell," and raised her price target on the shares to $24 from $21, on the strength of the company's TurboTax software for income tax preparation.