Intuit A Rare E-Commerce Success Story

by Mike Godfrey, Tax-News.com, New York

16 August 2002

This week, US supplier of tax preparation software Intuit reported a fourth quarter loss of $31.8m - but this is just a cyclical effect, because earnings for the 12 months to July 31 were $140.2m compared with a net loss of $82.8 million the previous year. Revenue was up 31% for the quarter and 18% for the year.

Although its shares are still 40% below highs they reached during the tech stock boom, Intuit is a rare example of a company that has made the transition from hoop-la to a stable business model.

Intuit is best known for its Turbo-Tax tax-preparation and QuickBooks accounting software. But in order to reach its good-looking current position the company has had to abandon a number of loss-making ventures, and focus down on the tax software and small company accounting sectors.

Analysts credit CEO Steve Bennett, a General Electric Co. alumnus, for the turnaround. He has raised pretax operating margins from 13% to 20% in two years, and has made canny acquisitions which are increasing earnings per share. Mr Bennett is wary of Microsoft, however: "So far, we've done OK against Microsoft," he says, but fears that as Intuit expands its product range it will come into competition with the giant.

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