Investing.com -- Shares in H&R Block Inc (NYSE:HRB) surged nearly 7% in after-hours trading after the world's largest tax services providers finished with mixed results for its first quarter of fiscal year 2016.
During the 13-week period, which ended on July 31, the Kansas City-based company increased its revenues by $4 million or 3% on a year-over-year over basis to $138 million. H&R Block attributed the revenue spike to higher product revenues, which it said was partially offset by the negative effects of a stronger dollar. The company, which has offices in Canada, Australia, Brazil and India, has been responsible for preparing more than 24.5 million tax returns worldwide.
Analysts expected H&R Block to earn revenues of $136 million on earnings of negative 0.40 per share for the quarter. The tax services provider also posted losses of $97 million or 0.35 per share, down from losses of $109 million or 0.40 over the same period last year. In addition, the company announced that it will no longer be regulated as a savings and loan holding company and that it is closing the bank divestiture transaction portion of its business.
"We are pleased that we have successfully closed the bank transaction and are committed to ensuring a smooth transition for our clients as we prepare for the upcoming tax season," H&R Block CEO Bill Cobb said in a statement. "Our teams are now fully focused on developing and executing a strategy that ensures an exceptional client service experience. We look forward to delivering another successful tax year for both our clients and our shareholders."
Also on Tuesday, the company announced a $3.5 billion share repurchase and capital structure plan that will be effective through June, 2019. On Wednesday, the company said it will launch a modified Dutch auction to repurchase up to $1.5 billion of common stock. The divestiture of H&R Block Bank will include the sale of certain assets and the transfer of certain liabilities, including all of its deposits to the B of I Federal Bank a month earlier than expected, the company said.
"We've selected a great partner in B of I, and we look forward to working with them on award winning value offerings to clients for many years to come," Cobb added. "This closing is the final step in divesting our non-core assets and focusing our business back on what we do best, taxes."
Shares in H&R Block gained 2.26 or 6.84% to 35.24 in after-hours trading.