IAC/Interactive Corp. today reported a 78 percent surge in profits for the second quarter, despite taking a loss in its real estate holdings, which include LendingTree and RealEstate.com.
Overall, IAC reported $96 million in net income, or 32 cents a share, while revenues were up 5.6 percent to $1.5 billion for the quarter. The company said that revenue reflects growth from every sector, including its sector that holds real estate even though there were declines at LendingTree.
LendingTree provides loans to consumers online through third-party exchange lenders, and also makes loans itself through LendingTree Loans. Like many companies in the lending space, it appears to be feeling the effects of a difficult home loan market.
LendingTree experienced a $1.3 million loss in the second quarter, down from a $9.8 million profit during the same period a year earlier. Revenue at LendingTree declined 9 percent to $98.6 million.
IAC said revenue declines at LendingTree were driven by fewer home equity loans sold into the secondary market and closed at the exchange. Refinance revenue, however, grew strongly while revenue from purchase loans fell.
LendingTree profits were also impacted by $3.7 million in costs associated with a cut in work force, IAC said. In May, LendingTree laid off about 440 workers as a cost-cutting response to falling revenue and loan production. (See Inman News story.)
The layoffs took place at the company’s headquarters in Charlotte, N.C., and at offices in Jacksonville, Fla., and Irvine, Calif. The company did not provide a breakdown of how many positions were eliminated in each city, but said the cuts affected 20 percent of LendingTree’s 2,200 workers and were distributed across the company and across functions.
Second-quarter losses widened within IAC’s real estate channel, which includes RealEstate.com, a consumer-agent matching service that also provides brokerage services in select West Coast markets.
IAC’s real estate sector widened its second-quarter loss by 28 percent to $8.7 million, while revenues increased 2 percent to $15.4 million.
The company said results within real estate reflect increased revenue from closings at the company-owned brokerage and fewer closings at the builder network.
ServiceMagic continued to grow its income with a 78 percent increase to $6.2 million. Revenues at ServiceMagic were up 58 percent to $25.3 million.
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 at $28.82 this morning, down about 5 percent from Monday’s closing price of $30.36.