The real estate segment at InterActiveCorp, the parent company to LendingTree and RealEstate.com, had an operating loss of $5.4 million for the third quarter, compared with an operating loss of $2.8 million in third-quarter 2004, the company reported today. Revenue for the real estate services segment was up 102 percent – from $8.1 million in third-quarter 2004 to $16.3 million in third-quarter 2005.
Meanwhile, the company’s lending operations improved from an operating income of $2.6 million in third-quarter 2004 to $25.3 million in third-quarter 2005. Revenue for that segment improved 258 percent – from $39.9 million in third-quarter 2004 to $142.8 million in third-quarter 2005.
“The significantly higher revenue and profit generated from the loans LendingTree is closing in its own name and improved conversion of customer traffic into revenue-generating transactions benefited (lending) results. Refinance mortgages performed strongly and increased as a percent of revenue from the prior year period, while revenue from purchase and home equity loans also increased. Lending profits grew faster than revenue due primarily to lower marketing expenses as a percentage of revenue, offset partially by lower gross margins as a percentage of revenue due to the higher costs related to originating, funding and closing loans,” IAC reported.
The company’s real estate division had a 34 percent increase in closings, which the company credits mostly to the acquisition of iNest in October 2004, and double-digit growth in the company’s other real estate businesses. “Real Estate losses increased principally due to higher marketing expenses relating to a test advertising campaign for RealEstate.com. RealEstate.com now makes available 1.5 million home listings,” IAC reported.
The company also has operations in the ticketing, teleservices and home services industries.
IAC’s home services segment includes ServiceMagic, which was acquired in September 2004. ServiceMagic acquired ImproveNet in August 2005 and these two businesses have integrated their operations.
IAC acquired Ask Jeeves on July 19, and spun-off Expedia to shareholders and effected a 1-for-2 reverse stock split on Aug. 9. Accordingly, results for Ask Jeeves are included from the date of acquisition, and results for Expedia prior to the spin-off are treated as discontinued operations.
Overall, IAC net income fell 24 percent – from $87.5 million in third-quarter 2004 to $68.1 million in third-quarter 2005. Revenue, meanwhile, grew 55 percent in that period, from $957.3 million in third-quarter 2004 to $1.48 billion in third-quarter 2005. Earnings per share were up 69 percent in that time, from 19 cents in third-quarter 2004 to 32 cents in third-quarter 2005.
IAC’s principles of financial reporting are available online at www.iac.com/investors.htm.
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