TAX NEWS - JUNE 2010

US Tax: Moody's Lifts Ratings On Intuit On Strong Performance

04 June 2010 -- Moody's Investors Service lifted its ratings on Intuit Inc. (INTU) by a notch, prompted by the tax-software maker's strong results during the recent downturn.

The ratings agency said in the 12 months ended April 30, Intuit, which makes TurboTax and QuickBooks, managed to increase its revenue, profit and cash position despite the financial crisis, as it retained its leading position in the consumer-tax and financial-software markets.

Intuit's Turbo Tax software business, which generated an average of 18% revenue growth in the past decade, grew 10% through April in the face of a decline in overall U.S. tax filers and perhaps more importantly, it grew paid users by 11%.

Moody's said the ratings boost was also a reflection of the company's strong cash generating capabilities and conservative financial policies.

The agency now has Intuit at Baa1, three steps into investment-grade territory. That rating reflects risk from Intuit's relatively concentrated business model, which depends heavily on its Turbo Tax and QuickBooks product lines.

Moody's outlook on the company remains stable, as it expects the company to continue to grow and maintain its modest debt levels.

Last month, Intuit said its fiscal third-quarter profit increased 19% on a strong performance during the recent tax season as its small-business segments saw a return to double-digit sales growth.

Shares were down 2.2% to $36.06 in recent trading, amid a broad market decline. The stock has risen 17% this year.