Intuit shares fell in after-hours trading Thursday after the tax-preparation software firm forecast revenue would decline sharply in the third quarter due to the coronavirus pandemic.
Intuit said it expected revenue to fall approximately 8% to between $2.99 billion and $3 billion, citing the negative impact of COVID-19 on small business customers and the extension of the tax filing deadline to July 15, which will shift revenue to the fourth quarter.
The company had previously guided for revenue to increase 10% to 11% to between $3.6 billion and $3.62 billion.
Intuit’s shares dropped 2.6% to $273.53 after it also warned investors that third-quarter profit would come in lower than it had guided for and that it was withdrawing its full-year outlook, reflecting “uncertainty in current small business trends.”
“During the first half of the fiscal year we grew total company revenue 14 percent, and we saw this momentum continue into the beginning of the third quarter,” CEO Sasan Goodarzi said in a news release. “However, the COVID-19 pandemic, which led to the extension of the IRS tax filing deadline and local shelter-in-place directives, negatively impacted performance beginning in mid-March.”
“Small businesses are facing a loss of income and a lack of savings to help them weather the storm,” he added.
Intuit expects Q3 revenue growth of about 10% from its Small Business and Self-Employed Group, driven by online ecosystem revenue growth of approximately 27% year-over-year.
But due to the extension of the IRS deadline, it is experiencing a “significant revenue shift” to the fourth fiscal quarter and, with more of its customers with complex returns likely to file later in the extended season, Consumer Group revenue is expected to decline approximately 15%.
The company called for unadjusted Q3 per-share earnings between $4.08 and $4.11, down from a prior guidance of between $5.53 and $5.58.