Intuit, the parent company of TurboTax and Credit Karma, experienced a significant setback as it reported a surprise loss in the fourth quarter and a disappointing profit outlook for fiscal 2025. This news caused Intuit’s stock to plummet, making it the worst-performing stock in the S&P 500 on Friday.
Fiscal 2025 First-Quarter and Full-Year Profit Guidance Falls Short
Intuit provided its fiscal 2025 first-quarter and full-year profit guidance, which fell short of expectations. The company expects earnings per share (EPS) between 61 cents and 66 cents for the first quarter, below the consensus estimate of analysts. Similarly, for the full year, Intuit anticipates EPS between $12.34 and $12.54, also falling short of expectations.
Intuit Swings to Unexpected Q4 Loss
While Intuit’s fourth-quarter revenue of $3.18 billion exceeded estimates and showed a 17% year-over-year increase, the company unexpectedly swung to a loss of 7 cents per share. This is a significant deviation from the 32 cents per share profit reported in the same quarter last year. Analysts had anticipated a profit of 22 cents per share, making this loss even more surprising.
Intuit’s Plans for Workforce Restructuring and Focus on AI
In July, Intuit announced its plans to lay off 1,800 employees, which accounts for roughly 10% of its workforce. However, the company also stated its intention to replace these employees with an almost equal number of staff members focused on artificial intelligence (AI) by fiscal 2025. This strategic move reflects Intuit’s commitment to leveraging AI technology to enhance its products and services.
Stock Performance and Investor Reaction
Following the disappointing financial results and profit outlook, Intuit’s stock experienced a significant decline. The stock price dropped over 7% to $616.39 as of 2 p.m. ET on Friday, pushing it into negative territory for the year. This decline reflects investors’ concerns about the company’s ability to meet its financial targets and deliver strong performance in the coming quarters.
Implications for Intuit’s Future
Intuit’s unexpected loss and soft profit outlook raise questions about the company’s ability to navigate the evolving market landscape successfully. As technology continues to advance, companies like Intuit must adapt and leverage AI to remain competitive. While Intuit’s plans to focus on AI are promising, the unexpected loss and profit outlook indicate that there may be challenges ahead.
Investors and analysts will closely monitor Intuit’s future performance to assess whether the company can rebound from this setback. The success of Intuit’s AI-focused strategy will be a key factor in determining its long-term growth and profitability.
Conclusion
Intuit’s disappointing financial results and profit outlook have had a significant impact on its stock performance. The unexpected loss in the fourth quarter and the below-expectation profit guidance for fiscal 2025 have raised concerns among investors. However, Intuit’s plans to replace laid-off employees with AI-focused staff members demonstrate its commitment to leveraging technology for future growth. As the company navigates these challenges, its ability to execute its AI strategy will be crucial in determining its future success. Investors and analysts will closely monitor Intuit’s performance in the coming quarters to assess its ability to rebound and deliver strong financial results.
