Shares of personal finance software maker Intuit (Nasdaq: INTU) wilted in after-hours trading after the Mountain View, California company said pro forma net income for its fiscal second quarter grew less than 3% and revenues grew just 14%, down from last year's 46% pace.
After closing at $72 5/16, Intuit shares slipped to about $63 1/2.
The company's earnings met analyst estimates, coming in at $0.44 per share, compared to $0.45 per share a year ago. Investors, however, want to see growth companies scoring big gains on the top line and the bottom line, and Intuit has enjoyed an Internet-style run-up over the last quarter. The stock is down so far this year, but since October's low of around $23, shares have climbed as high as $90.
Management expected slower revenue growth for a number of reasons. The company launched a marketing strategy for its Quicken TurboTax product that included price reductions to defend its turf against new competitor Microsoft (Nasdaq: MSFT); $25 million to $30 million in certain electronic tax filing revenues were deferred to the third quarter; and Intuit closed several offices related to its acquisition of Internet mortgage company Rock Financial, leading to lower mortgage revenues.
On the income side, growth slowed because of heavy investments in e-finance initiatives. This is where the company believes its future lies. Its Internet businesses, which include services like electronic tax filing (TurboTax), reported $89.1 million in revenue for the quarter, up 2.6 times last year's number. Internet revenues represented 21% of total revenues this quarter, compared to less than 10% a year ago. Overall, the company still expects to grow operating income 20% this year.
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