Intuit falls after giving tepid outlook despite new AI tools

Intuit Inc., the maker of the TurboTax tax preparation software, dropped in extended trading after giving a sales and profit outlook for the current quarter that fell short of analysts’ estimates, disappointing investors looking for a boost from the company’s new AI products.

Revenue will be about $3.83 billion in the period ending Jan. 31, the company said Thursday in a statement. Analysts, on average, estimated $3.86 billion, according to data compiled by Bloomberg. Earnings, excluding some items, will be about $2.58 a share in the fiscal first quarter, also missing estimates. 

Intuit, however, affirmed its fiscal year forecast issued in September for sales of about $18.25 billion and adjusted profit of about $19.26 a share.

The financial software company is working on implementing artificial intelligence features through its applications including tax preparation program TurboTax. Earlier this week, Intuit launched an AI assistant tool for QuickBooks, which helps businesses manage taxes and other financial results.

The shares declined about 8% in extended trading after closing at $678.70 in New York. The stock has gained 8.6% this year. 

Intuit’s stock dropped earlier this week after the Washington Post reported that the leaders of President-elect Donald Trump’s “Department of Government Efficiency” have discussed creating a mobile app for Americans to file their taxes for free. Intuit reported in May that it lost 1 million customers who use the free version of TurboTax, although executives have said the company is working to cater the software to those with more complicated tax situations who would buy the product.

In the fiscal first quarter, sales rose 10% to $3.28 billion. Analysts, on average, projected $3.14 billion, according to data compiled by Bloomberg. Those gains were led by Credit Karma, which jumped 29% to $524 million, topping estimates. The unit aggregates loans and helps users track cash flow.