Industry News

ZipRealty reports second-quarter loss

Settlement over compensation practices hurts bottom line

ZipRealty Inc. today announced a $946,000 net loss for the second quarter, which includes a $4.1 million one-time charge relating to the pending settlement of a threatened class-action lawsuit over employee compensation practices in California. ZipRealty had earlier announced that there could be possible legal action relating to the company's practice of requiring a minimum level of productivity from its real estate agents to effectively qualify to receive an expense allowance. And the company had said it believes that any necessary adjustments to its expense-allowance practices would not materially impact future profit margins. Meanwhile, net revenues were $25.8 million for the second quarter, which is a 58 percent increase from the $16.3 million generated in second-quarter 2004, and the company reported operating expenses of $27.4 million for the quarter. The agreement to settle the expense allowance litigation "is subject to the execution of a definitive settlement agre...