H&R Block shares skid on sales outlook
Not all corporations are happy about President Donald Trump’s tax overhaul: H&R Block Inc. shares plunged after an earnings call revealed that one of the main provisions in the law could limit how much the tax adviser charges customers.
H&R Block shares dropped 18 percent on Wednesday after its sales forecast disappointed. Management said it expects 2019 revenue of $3.05 billion to $3.1 billion. The average analyst estimate for the period was $3.14 billion.
Trump’s overhaul slashed the corporate tax rate to 21 percent from 35 percent. But for H&R Block, the provision in the law that doubles the standard deduction for individual taxpayers could ultimately hurt its business. The number of U.S. tax returns H&R Block prepared increased by 2.5 percent last year compared with the prior year, but its pricing is contingent upon the complexity of the filing.
The tax overhaul is expected to sharply reduce the number of Americans who tend to have more complicated returns because they itemize their deductions. That’s because the law doubles the standard deduction to $12,000 for single filers and $24,000 for couples, while also eliminating or limiting deductions. Employees can no longer deduct unreimbursed work expenses, such as union dues, travel expenses, and home offices. Deductions for state and local taxes are capped at $10,000.
— Bloomberg News
Judge orders EPA to act on ozone plans
The U.S. Environmental Protection Agency was ordered by a judge to act on plans to limit the ozone pollution from five states upwind of New York and Connecticut, a victory for the Democratic-led states pressing President Donald Trump’s administration to enforce environmental regulations.
The agency originally published revised air-quality standards for ozone in 2008 and found in July 2015 that 24 states had failed to submit plans to satisfy the requirements. The EPA had until August 2017 to issue plans for the states that defaulted, but failed to meet the deadline.
Connecticut and New York sued the EPA in January seeking a court order requiring the agency to implement plans to limit ozone emissions from Illinois, Michigan, Pennsylvania, Virginia and West Virginia.
The EPA said it intends to propose an action by the end of June that will address any remaining “good neighbor” obligations related to the 2008 ozone standard for these and other states and finalize it by December.
— Bloomberg News
Bad news sends bitcoin to 4-month low
NEW YORK — The price of bitcoin fell to a four-month low of $6,370 on Wednesday, days after South Korean digital currency exchange Coinrail said hackers had stolen over $37 million, or almost a third of the virtual currency it had stored.
After Coinrail announced the theft, the price of bitcoin dropped to $6,333.95 per bitcoin. It is down $1,374.10 in the last week, according to Coinbase. At 3:30 p.m., bitcoin was quoted at $6,306.95.
The decline also follows a Wall Street Journal report that U.S. regulators have asked virtual currency exchanges to provide trading data to aid an investigation into virtual currency manipulation. The reports raised concerns about the future of virtual currency markets.
On Wednesday, The New York Times cited a paper by academic researchers that found last year’s price bubble may have been caused by one digital currency exchange known as Bitfinex. The researchers found patterns where bitcoin’s prices would be supported any time Bitfinex would issue more of its own digital currency, Tether, which was supposed to be backed up 1-to-1 with dollars.
-- The Associated Press
S.C. lender fined $5M over harassment
For years, a South Carolina lender “humiliated and harassed” customers by directing its employees to approach them at their homes, jobs or even at grocery stores to collect on debts, according to a government settlement announced Wednesday.
Between 2011 and 2016, Security Group either attempted or completed these in-person collection visits more than 12 million times, targeting 1.3 million customers, according to the Consumer Financial Protection Bureau. Some consumers were threatened with jail, shoved or “physically blocked” from leaving private property, according to a consent order.
Security Group, which offers short-term, high-cost loans, agreed to a $5 million fine.
This is just the second enforcement action taken by Mick Mulvaney, who was appointed the CFPB’s acting director by President Donald Trump in November. In April, the watchdog agency fined Wells Fargo $1 billion for improperly charging customers for auto insurance they didn’t need and to lock in mortgage rates.
A Security Group representative could not be immediately reached for comment. The company has about 900 locations across more than a dozen states. It also uses several names, such as Friendly Finance, Money Finance and Patriot Loan, according to the consent order.
--The Washington Post
Rolls-Royce overhaul to cut 4,000 jobs
Rolls-Royce Holdings PLC will eliminate about 4,000 jobs as the U.K. jet-engine manufacturer seeks to simplify its business and increase profit margins, according to people familiar with the matter.
The cuts will result in annual cost savings of about $400 million to $530 million, said the people, who asked not to be named discussing information that isn’t public. The measures will be announced as soon as today, ahead of an investor presentation scheduled Friday, they said.
The latest retrenchment is the deepest since Chief Executive Officer Warren East took charge in 2015 and extends the total jobs eliminated under his leadership to close to 10,000. The company had about 50,000 workers last year, according to its latest annual report.
East has been signaling the moves for months, as Rolls-Royce contends with pressure from activist shareholders, engine durability issues and a price squeeze from major customers Boeing Co. and Airbus SE.
— Bloomberg News