Second-quarter revenue was up but profits were down at real estate lead generator HouseValues Inc., the company said today as it announced the departure of its chief financial officer and a plan to buy back up to 2 million of its own shares.
HouseValues, which generates sales leads from information consumers enter at Web sites including HomePages.com, TheLoanPage.com, HouseValues.com and JustListed.com, says it signed up more than 3,700 new agents as customers during the quarter.
That helped boost revenue to $25.9 million, an increase of 26 percent from the second quarter of 2005. Net income was $1.9 million, compared with $3.7 million last year. The company said the 49 percent decline in profits was partly due to $1 million in stock compensation charges.
Earnings per share dropped from 14 cents to 7 cents per share. HouseValues said it no longer expects to meet previously announced earnings projections, and has decided “to discontinue its practice of providing explicit guidance” on the company’s financial outlook “because of the unclear near-term impact of a changing real estate market, as well as entry into new businesses with which the company has less history.”
Chief Financial Officer John Zdanowski has left the company to “pursue other interests” and Vice President of Finance Jacqueline L. Davidson has been appointed interim chief financial officer, the company said.
To demonstrate their confidence in the company’s future, the company’s board of directors today announced a plan to buy up to two million shares of HouseValues common stock. The company says it had $87 million in cash and short-term investments at the end of the quarter to back the plan up.
“We believe that repurchasing HouseValues stock represents a good long-term use of our excess cash and reflects our ongoing commitment to enhancing value for shareholders,” said Chief Executive Officer Ian Morris in a press release. “Strong growth projected for online real estate marketing spending coupled with our leadership position in the space underscores our confidence in HouseValues’ long-term business prospects.”
Shares in HouseValues closed at $6.27 Tuesday, off about 4 percent from Monday’s close and down from a 52-week high of $18.15. In after-hours trading, HouseValues was down 10 percent to $5.63.