IAC/InterActiveCorp., owner of LendingTree and RealEstate.com, today reported a 10.1 percent increase in quarterly profit over the same period a year ago, with GAAP diluted earnings per share at 24 cents a share, up from 20 cents a share last year.
Third-quarter revenue increased 11 percent to $1.6 billion, according to the media and Internet company’s earnings announcement.
IAC said the quarter reflects a modest increase in retailing, while revenue from HSN was flat and real estate and lending revenue was lower due to fewer sales closings.
IAC’s holdings include home shopping, ticket, travel, lodging, dating and mortgage and real estate-related businesses. LendingTree is the anchor of IAC’s financial service and real estate businesses, which include RealEstate.com, GetSmart.com and Domania, among others.
Quarterly revenue slid in IAC’s lending and real estate segments; lending revenues fell from $109.4 million in the same quarter a year ago to $106 million this quarter, and real estate revenues fell from $16.3 million in the third quarter 2005 to $15.9 million.
Operating income in the lending category also fell from $25.3 million a year ago to $15.2 million in the third quarter. In the real estate category, the company’s operating loss widened from a $5.4 million loss to an $8 million loss in the third quarter this year.
The company said the decline in lending revenue resulted from lower refinance revenue, fewer loans being sold into the secondary market and fewer closed sales. “The difficult mortgage market environment continued, leading to a decline in close rates across all home loan products, especially in refinance,” the company stated in an earnings release.
“Revenue from purchase and home equity loans grew in the double digits, with purchase revenue growing faster, primarily due to strong growth in purchase loans at LendingTree Loans,” according to the release.
In real estate, the company said, “Revenue declined slightly due principally to fewer closings at the broker and builder networks. However, Real Estate revenue benefited from closings in the new brokerage business, which was not in the prior-year results. Losses increased due primarily to costs associated with Web site development and the launch of this new brokerage business.”
IAC’s Home Services segment — which reflects results of ServiceMagic, a service that matches consumers to local services providers — saw an increase in revenue and operating income from year-ago results. Revenue in the segment increased from $12.2 million during the same quarter last year to $18.5 million in the third quarter, and operating income increased from $2.6 million to $5.1 million.
Commenting on the third-quarter results, Barry Diller, chairman and CEO of IAC said: “We are unabashedly building an interactive conglomerate. We have three interrelated strategies: one, the growth of each of our businesses; two, Ask.com as the connecting thread; and three, all our cross company efforts, which allow us to leverage our audience, scale and diversified expertise.”
IAC repurchased 7.3 million shares of common stock at an average price of $26.44 between July 28 and Oct. 27, 2006. During 2006, IAC has repurchased 34 million shares at an average price of $26.75, and has 8.8 million shares remaining in its current stock repurchase authorization. IAC also announced today that its board of directors has authorized the company to repurchase up to an additional 60 million shares of common stock.
IAC shares (Nasdaq:IACI) were trading at $30.82 today, up 3.35 percent from Monday’s closing price of $29.82.