H&R Block Inc. (HRB), the largest U.S. tax preparer, Wednesday said its quarterly earnings rose 16 percent, as its tax and mortgage operations grew.

The Kansas City, Mo.-based company also raised its dividend 10 percent and said its board of directors voted to authorize an additional share repurchase.

The company said earnings for its fourth quarter ended April 30 rose to $575.6 million, or $3.23 per share, from $494.6 million, or $2.71 per share, a year earlier.

Wall Street analysts, on average, were expecting earnings of $3.18 per share, according to Reuters Estimates (search).

The company makes most of its profits during its fourth quarter, which includes the busy U.S. tax season. Although the number of tax clients it served declined by 0.8 percent, the average fee per client rose by 8 percent.

Revenue rose 15 percent during the quarter to $2.19 billion from $1.91 billion.

"We saw pretty good, healthy performance out of virtually every line of our business," H&R Block CEO Mark Ernst told Reuters.

H&R Block said it expected fiscal 2005 earnings of $4.00 to $4.25 per share. It said it expected earnings in its mortgage business to flatten or decline during the fiscal year because of higher interest rates, partially offsetting earnings growth in other businesses.

Analysts on average expect earnings per share of $4.07 for the 2005 fiscal year.

H&R Block upped its quarterly cash dividend 10 percent from 20 cents per share to 22 cents per share. The dividend is payable on Oct. 1 to shareholders of record on Sept. 10.

The board of directors also authorized the company to repurchase up to 15 million of its shares in addition to 11.3 million shares already eligible for repurchase.

H&R Block shares closed down 65 cents, or 1.37 percent, at $46.83 on the New York Stock Exchange (search).