Real estate marketing and technology company HouseValues on Tuesday reported a net loss of $1.5 million in the third quarter, down 134.9 percent compared with net income of $4.3 million in third-quarter 2005. The company reported revenue of $24 million in the third quarter, up from $23.3 million in third-quarter 2005.

The company had a net loss of 6 cents per share in the third quarter compared to earnings per diluted share of 16 cents in third-quarter 2005.

“Sales and marketing expenses were significantly higher than the comparable quarter of the prior year, primarily due to higher media expenses and increased sales staff to support expansion of markets served and products offered,” HouseValues reported. “The increase in media expense primarily reflected the company’s support for new products launched in the past year and lower consumer response rates attributed to market conditions.”

On a sequential quarter basis, the company reported that revenue fell 7 percent in the third quarter compared to the second quarter, “reflecting declines in average revenue per real estate customer and mortgage revenue,” the company announced, adding that the decline “reflected lower pricing in some areas where housing transaction volumes have slowed significantly, coupled with the company’s successful expansion into historically underpenetrated markets that tend to be lower priced.”

Ian Morris, HouseValues CEO, said in a statement, “While we are not satisfied with our third-quarter financial results, HouseValues grew its customer base modestly and generated $1.5 million in cash from operations during the period despite challenging real estate market conditions.”

The HouseValues (NASDAQ: SOLD) share price opened the day at $6.09 and fell to $5.86 during regular trading. During after hours trading Tuesday the price per share had dropped to $5.43 at about 6 p.m. Eastern Time.

The company reported sales and marketing expenses of about $17.3 million in the third quarter, up about 49.7 percent compared to sales and marketing expenses in third-quarter 2005. Technology and product development costs grew about 85.9 percent — from $1.8 million to $3.4 million — in the third quarter compared to third-quarter 2005.

For the first nine months of the year, the company reported net income of $2.2 million, down 79.9 percent compared with net income of $11 million for the first nine months of 2005. The company had an adjusted EBITDA — a financial measure of earnings before net interest, income taxes, depreciation, amortization and stock-based compensation — of $436,000 in the third quarter, down 93.6 percent compared to third-quarter 2005 EBITDA. And EBITDA for the first nine months of the year was $8.2 million, down 53.1 percent compared to EBITDA for the first nine months of 2005.

HouseValues expects to generate a greater portion of its lead production through nationwide advertising campaigns over time, according to the earnings announcement. “As such, the company expects that better alignment of its customer base with the reach of its consumer advertising programs will favorably impact future lead generation costs and strengthen the company’s competitive advantage in the years to come,” the company announced.

The company’s board of directors has authorized the purchase of up to 2 million shares of the company’s common stocks, according to the announcement. “Supporting this authorization, HouseValues had $78.9 million in cash, cash equivalents and short-term investments at quarter end.” HouseValues previously announced an authorization to repurchase up to 2 million shares of the company’s common stock on July 25th and completed all previously authorized purchases on Oct. 27. The cost was $11.4 million, or an average price of $5.72 per share.

Founded in 1999, HouseValues Inc. operates the HouseValues.com, HomePages.com, TheLoanPage.com, and JustListed.com Web sites.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×