IAC/Interactive Corp. today reported growth in first-quarter earnings, but the media conglomerate felt the weight of a slowing housing and mortgage market on its LendingTree unit.
Overall, IAC saw a 32 percent growth in net income to $62.1 million over the prior year, while revenues climbed 10 percent to $1.6 billion for the quarter. Diluted earnings per share rose 46 percent to 20 cents a share.
Strong growth at Ticketmaster and ServiceMagic was partially offset by a decline in LendingTree revenue, which continues to feel the impact of a lagging mortgage market, the company said Thursday.
Revenue at LendingTree fell 12 percent to $100 million from the prior year, while operating income at the unit plunged 99 percent to $100,000. IAC attributed the decline to fewer loans being sold into the secondary market and fewer loans closed at the online lending exchange.
“Lenders’ narrowing focus on traditional mortgage products in reaction to changes in the mortgage market contributed to lower close rates, a shift to lower margin products, and lower revenue per loan sold at LendingTree Loans,” the company said.
Home equity revenue also declined significantly, the company said, and refinance revenue was down slightly. Purchase revenue was up slightly.
LendingTree matches consumers with lenders, and also maintains its own mortgage lending business.
Meanwhile, revenue within the company’s real estate unit, which includes RealEstate.com and the newly added company-owned brokerage business, climbed 16 percent to $13.2 million. However, the operating loss widened by 18 percent within the unit to a loss of $8 million, due primarily to the higher costs associated with the geographical expansion of the company-owned brokerage, and higher costs related to the development and re-launch of the RealEstate.com Web site, the company said.
The newly launched RealEstate.com is now live in 46 markets.
RealEstate.com matches consumers with real estate brokers. The company also operates a brokerage business, which is now operating in eight markets. In April, RealEstate.com named Bret Violette the new president of the division.
ServiceMagic revenue grew strongly, up 55 percent to $21.6 million, with operating income growing 136 percent to $5.3 million. The company attributed the growth in this unit to a 52 percent increase in customer service requests and a 24 percent increase in the number of service providers in the network.
ServiceMagic matches consumers to local service providers such as contractors, plumbers and electricians, among others.
IAC operates more than 60 brands both online and offline. Some of the company’s non-real-estate holdings include Ticketmaster, Home Shopping Network and Match.com.
IAC shares (Nasdaq: IACI) were trading around $36 a share this morning, down about 5.9 percent from Wednesday’s closing price of $38.59.