H&R Block, Inc. (HRB:NYSE)

A district court erred in appointing a sole lead plaintiff for a securities fraud case against H&R Block Inc. The appellate court affirmed the dismissal of the class action against the company and several corporate officers and directors. The consolidated case arose from nine separate actions filed by shareholders concerned with Block's restatements of financial results and errors in the calculation of the company's corporate income tax. The 8th circuit agreed with the lower court's findings that the complaint failed to adequately plead the element of 'scienter,' or 'wrongful state of mind' under the heightened pleading requirements of the Private Securities Litigation Reform Act. However, the court reinstated two related actions filed by Momentum Partners and Iron Workers Local 16 Pension Fund. Both funds asserted breaches of fiduciary duty arising from Block's allegedly wrongful business practices. The lead plaintiff, Horizon Asset Management Inc., had refused to include the funds' derivative claims, filed on behalf of Block against its directors, in the consolidated complaint.

H&R Block Corporate and Eliminations announced unaudited earnings results for the first quarter ended July 31, 2009. For the quarter, the company reported a pretax loss of $40.2 million, compared to a loss of $49.0 million in the prior year. The improvement was due to prior-year impairments of residual interests in mortgage loan securitizations and other real estate owned totaling $9.1 million that did not recur. The total allowance for loan loss reserves was $91.7 million at July 31, 2009, compared to $84.1 million at fiscal 2009 year-end. Revenues were $9.92 million compared to $15.56 million for the same period a year ago.

H&R Block, Inc. announced unaudited condensed consolidated earnings results for the first quarter ended July 31, 2009. For the quarter, the company reported net loss from continuing operations of $130.6 million, or 39 cents per basic and diluted share compared to a loss of $128.4 million, or 39 cents per basic and diluted share in the first quarter a year ago. Improved pre-season results from Business Services and lower corporate expenses were partially offset by an expected larger loss in Tax Services. Revenues from continuing operations grew 1.3% over the prior-year period to $275.5 million. Consolidated net loss was $133.6 million, or 40 cents per basic and diluted share, essentially flat compared to a loss of $132.7 million, or 41 cents per basic and diluted share a year ago. Loss from continuing operations before tax benefit was $210.87 million compared to $212.97 million for the same period a year ago. Operating loss was $214.16 million compared to $211.62 million for the same period a year ago. Net cash used in operating activities was $454.58 million compared to $364.92 million for the same period a year ago. Amount spent on purchases of property and equipment was $8.76 million compared to $14.64 million for the same period a year ago. The company continues to expect its fiscal 2010 earnings from continuing operations will be in the range of $1.60 to $1.80 per share.