Shares of stock in Intuit Inc., known for its TurboTax, Quicken, and QuickBooks programs, dropped nearly 24% in trading on Friday after the company released news that it would not meet its 2003 growth targets due to unexpected weaker sales of software during tax season.
Prudential Securities analyst Bryan Keane noted that Intuit's sales may be down due to the fact that many computer-using taxpayers have been diverted to the IRS's new FreeFile program that offers free online tax filing services to qualifying taxpayers. Intuit is one of the members of the consortium of software companies offering its online tax preparation and filing services for free through the IRS.
Mr. Keane also made reference to the controversy that has surfaced over the new anti-piracy product activation feature that was added to TurboTax this year. The feature prevents users from installing the software on more than one computer.
In addition, Mr. Keane noted that sales of Intuit's small business accounting software QuickBooks may be flat due to cost cutting measures adopted in the weakened economy.
Intuit stock prices plummeted Friday from $50.89 to $38.72 and rebounded only slightly to $38.94 on Monday after Intuit management announced a plan to buy back $500 million worth of company stock over the next three years.
"We are acquiring new companies to provide platforms for future growth," said Steve Bennett, Intuit's chief executive. "And at the same time, we're using our strong cash position to continue to repurchase our stock."