The company reiterated its fiscal 2001 pro forma operating income commitment of $205 million to $213 million, which it had most recently confirmed during its second quarter earnings announcement in February. Executives also said revenue growth would be slower than expected, with a revised range of $425 million to $450 million for the third quarter, and $1.26 billion to $1.3 billion for the full fiscal year. The company remains committed to 32 percent pro forma operating income growth for fiscal 2001, despite this softness in revenue.

For fiscal 2002, which begins Aug. 1, president and chief executive officer Steve Bennett said the company currently expects to achieve a minimum pro forma operating income growth of between 25 percent and 30 percent.

"Our strategy is straightforward - to win big in every business we're in," said Bennett, speaking before a group of investors and journalists at the company's fifth Inside Intuit Conference. "We want to achieve, or be on the path to achieve, a sustainable competitive advantage in each business."

Bennett, who joined Intuit 14 months ago, said the company is adopting increased strategic and operational rigor as it works to fulfill its mission of revolutionizing how people and small businesses manage their financial activities.

"A year ago we were a company with great assets but we were under-performing," Bennett said. "We needed better focus and better execution. Today, we've got even greater assets -- starting with our employees, our loyal customer base and our brands - and we're making the changes to ensure we're firing on all cylinders throughout the company."

Mountain View-based Intuit provides financial software and services for consumers, small businesses and accounting professionals. Its portfolio includes 11 businesses with more than $10 million in annual revenue. Nine of these businesses, including Quicken Loans, Payroll and the company's two tax businesses, are currently performing at or above long-term revenue targets.

"We have a diverse portfolio of businesses with a wide breadth of growth dynamics," said Bennett. "It's normal - and expected - for some to grow faster than others."

For example, Quicken Loans and Payroll have expected long-term annual revenue growth rates of about 30 percent, while estimates for Quicken and Quicken.com are below 10 percent annually. Other businesses fall between 10 percent and 30 percent.

During the meeting, Bennett and other top executives laid out financial expectations and explained key business strategies.

Financial trends
Profitability - Executives said Intuit is growing its profitability while reinvesting to drive future growth. The company expects to return about two-thirds of its fiscal 2001 pro forma operating profits to shareholders while reinvesting the remaining third in the company.

Revenue - Intuit is seeing strength from Quicken Loans and the company's Deluxe Payroll offering, both of which are expected to achieve greater than 50 percent growth in fiscal 2001, despite softer total revenue.

The company's service businesses are contributing an increasing portion of its revenue, and are expected to account for about 29 percent of Intuit's total revenue for the year. Among the company's service businesses are mortgage, payroll and electronic tax preparation and filing services. Service revenue, with a large market potential, provides recurring revenue streams and is less dependent on upgrades.

Expense management - By better leveraging its assets, Intuit is working to do more with less, Bennett said. For example, the company is improving customer service and technical support quality, while simultaneously expecting associated costs to decline to less than 12 percent of revenue for the full fiscal year.

Tax
Intuit's tax business, including both consumer and professional products, continues to be a strong performer, with the company expecting solid revenue growth from both businesses this year.

Quicken TurboTax desktop software continues to hold a 69 percent share of retail units, the same as a year ago, while its dollar share at retail has increased to 82 percent from 74 percent a year ago, despite a modest price increase.

Quicken Loans
Quicken Loans, whose goal is to become the leading online mortgage origination company, is experiencing strong revenue growth, due in part to lower interest rates. The business is contributing to Intuit's profitability in fiscal 2001, reflecting a significant year-over-year earnings turnaround. The company estimates that about $70 million in annualized revenue represents a breakeven volume for this business.

Payroll
The Payroll Services business is built on three separate offerings. By focusing on operational execution and value-based pricing, the business expects to achieve a more than $20 million improvement in pre-tax pro forma profitability in the current fiscal year compared to fiscal 2000.

Small Business
Small business products and services currently generate nearly half of Intuit's annual revenue, with growing revenue and pro forma profits. While the strongest growth has been in small business services, the company also noted three areas, QuickBooks desktop software, QuickBooks Internet Gateway and Site Solutions, that are not meeting year-to-date revenue expectations.