H R Block

H&R Block Inc. said an Illinois judge rejected a $25-million settlement the tax preparer had negotiated to resolve claims over high-interest-rate loans issued to its customers in advance of tax refunds. The proposed Illinois settlement would have resolved all U.S. claims against the firm's refund-anticipation loan program. Shares of Block, which said it would not meet its goal for tax customers this year because of a slow tax season, dropped $3.64 to $37.98 on the New York Stock Exchange.

H&R Block Inc., the largest U.S. tax preparer, said fiscal third-quarter earnings more than quadrupled to $132 million as it sold assets related to its mortgage business. The Kansas City, Mo.-based company earned 73 cents a share, compared with $29.6 million, or 16 cents, in the year-earlier period. Revenue increased 30.7% to $958.4 million. The company said it expected to earn $3.10 to $3.25 a share in fiscal 2003, an increase of its previous forecast. H&R Block shares fell 42 cents to $37.

H&R Block said it no longer will own any part of the loans it offers clients awaiting tax refunds, a move expected to cost the company $50 million a year in revenue. The change is part of a one-year pact between Block and the company that provides the loans, Household Tax Masters Inc. In the past, the lender has paid Block a fee for each refund loan. Block also retained as much as a 49.9% interest in the loans.

An office manager at tax-help firm H&R Block Inc. used customers' names, Social Security numbers and dates of birth to steal their refund checks, withdraw cash from their bank accounts and spend thousands of dollars with fake credit cards, according to a federal complaint disclosed Thursday.

H&R Block Inc. said Tuesday that it would give 700,000 customers rebate coupons for tax preparation services to settle a class-action lawsuit in Texas over loans given in advance of tax refunds. The settlement, which also covers the plaintiffs' legal fees, removed uncertainty about the company's potential legal liabilities. Its ailing shares jumped as much as 12%. The Kansas City, Mo.

H&R Block Inc. said that it filed for a federal bank charter that would allow the largest tax-preparation company to offer savings accounts. Another opportunity that the bank charter would provide is for the firm's Option One Mortgage Corp. unit to take deposits and use them for lending, spokesman Bob Schneider said. The company plans to open a pilot branch in Irvine, where Option One is based. Shares of the Kansas City-based company closed up 85 cents at $45.88 on the NYSE.

Leading U.S. tax preparer H&R Block Inc. said its tax business revenue for the season through March 15 was up 12.1% from a year ago to $1.4 billion, boding well for its earnings, while customers also are seeing more money in their pockets. Total clients served increased 3.6% to 13.2 million, and the average fee per client served rose 9.1% to $117.03, the Kansas City, Mo.-based company said. "The average refund is running in excess of $2,000; that is up 20%," said Chief Executive Mark Ernst.

AOL Time Warner Inc. agreed to promote services from H&R Block Inc., the world's biggest tax preparer, on its Internet and television networks, including America Online and Time Warner Cable. H&R Block will offer America Online service to clients at its 10,400 offices worldwide. Terms of the agreement weren't disclosed. Separately, H&R Block said its fiscal first-quarter losses narrowed to $30.8 million, or 17 cents a share, from $51.

H&R Block Inc. said its fiscal fourth-quarter net profit rose 10% to $374 million, or $4 a share, in line with expectations, as it charged customers more for its main tax preparation services. But the firm warned that its revenue growth over the next 12 months probably would be lower than its target of 10% to 15%, as its investment management operation continues to struggle with ailing stock markets. The Kansas City, Mo.