Intuit forecasts lower-than-expected quarterly results due to weak demand, postponed promotions

Nov 21 (Reuters) – Intuit on Thursday forecast second-quarter revenue and profit below market expectations, citing weak demand for its financial management services and plans to change the timing of promotions.

The company’s consumer-facing consumer segment expects second-quarter revenue to fall by single digits due to delays in promotions for its TurboTax desktop product, which is widely used by Americans.

Intuit said the delay would only impact revenue timing and reiterated its forecast for double-digit annual revenue growth.

The company offers financial products, including personal finance portal Credit Karma, marketing platform Mailchimp and QuickBooks, an accounting software suite that helps small businesses manage their finances.

The company’s shares fell 5.1% on Tuesday after The Washington Post reported that President-elect Donald Trump’s government efficiency team is considering creating a free tax filing app.

“I am personally engaging with the incoming leaders and the new government,” Chief Executive Sasan Goodarzi told Reuters.

“They are looking for opportunities to make the tax code simpler overall. As we have said all along, another free tax software is not going to make any difference because free (software) is already available to all Americans,” he added.

Intuit’s competitors include H & R Block, Oracle’s NetSuite and Microsoft’s Dynamics 365 Platform, which all offer similar financial services.

Revenue for the second quarter ended Jan. 31 is expected to be between $3.81 billion and $3.84 billion, below analysts’ average estimate of $3.87 billion, according to data compiled by LSEG.

The company forecast quarterly adjusted profit of $2.55 to $2.61 per share, below the average estimate of $3.20.

Revenue rose about 10% to $3.28 billion in the first quarter ended Oct. 31, beating estimates of $3.14 billion. Excluding items, earnings per share were $2.50, compared with expectations of $2.35 per share. (Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)