Financial software maker Intuit’s longtime CEO Steve Bennett will leave the company at the end of the year, the company said Wednesday as it announced its fourth quarter and fiscal year earnings. The firm named the general manager of the company’s small business division, Brad Smith, to replace him. Bennett has held the posts of CEO and president since 2000.
Intuit said it lost $13.6 million in its fiscal fourth quarter, or 4 cents a share, down from $18.9 million in the year-ago quarter. Revenue was $432.7 million in the fourth quarter, up 31 percent from the same quarter in 2006 and ahead of the consensus forecast of Wall Street analysts.
During Bennett’s time at the helm, Intuit saw revenue nearly triple, and earnings rose four-fold. Bennett will remain a member of the company’s board and will serve through the middle of next year in a consultant’s role, Intuit said.
‘The Right Time’
Bennett is an “outstanding leader” who laid “pillars of growth” for the future, said Bill Campbell, the company’s board chairman.
Bennett did not give a reason for his departure, but said “it’s the right time for me to take some time off andexplore the next challenge in my life.”
His departure comes after one of the larger public relations disasters for Intuit when, during the peak of tax season, some users of the company’s TurboTax tax preparation products, were unable to file their returns on time.
Time to Go?
Intuit suggested it had been planning for succession at the top, saying Smith had been involved with those efforts. The 43-year-old will continue to oversee the small business operations — a key market segment for Intuit — until the end of the year. Smith has also led Intuit’s consumer operations and its unit that designs solutions for the accounting industry in the past.
“Having led each of our biggest businesses, Brad has a proven track record inside and outside of Intuit,” said Bennett, who added that Smith has had a hand in shaping the company’s market strategy as well.
Bennett came to Intuit from General Electric, and many saw him bringing that company’s aggressive approach to expanding through acquisitions. Intuit did make some moves during Bennett’s time at the helm to beef up its exposure to the financial marketplace, most recently byacquiring Digital Insight, a firm that provides Web-based banking service in a deal worth US$1.35 billion.
Slower Growth Rate Expected
At the time, Bennett said the purchase would allow Intuit to enable consumers and small businesses a way to better integrate their financial lives on the Web by connecting their banking, accounting and tax records.
In 2006, the company announced a partnership with Google through which the two companies will sell their software and services to millions of small and medium-sized businesses.
The departure comes as Intuit’s growth rate is expected to slow, in part due to the company’s increasingly large size. While double-digit revenue growth has been routine in recent years, that rate may fall into the high single digits by the end of this year, Standard & Poor analyst Jim Yin told the E-Commerce Times.
“The natural organic growth is starting to slow,” Yin said.
Intuit said small business sales were strong in the fourth quarter, and that the February acquisition of Digital Insight also helped boost revenue in what is typically the weakest quarter for the company, one that includes the period after the tax deadline has passed as well as the start of the summer.
In fact, the quarter offers little insight into the business prospects of Intuit, said James Macdonald, an analyst with First Analysis Securities. The next quarter may be more telling, with a new version of QuickBooks due to hit stores.
In contrast, the changing of the guard comes at a “critical time” for Intuit as it integrates it acquisition and as it girds for what is expected to be intense competition in the small business arena from Microsoft.
“This change comes at a critical period for Intuit,” Macdonald told the E-Commerce Times.
The news of Bennett’s departure and Intuit’s earnings and outlook seemed to unsettle Intuit investors, with shares down more than 3.7 percent in afternoon trading to $27.83.