Bankrate Shares Plummet 15% As Q2 Revenues Miss View, But Adj Earnings Match

(RTTNews) - Shares of Bankrate, Inc. (RATE) plummeted fifteen percent in extended trading on Thursday after the online financial information service provider reported adjusted revenues for the second quarter that missed analysts' expectations, while adjusted earnings per share matched it.

However, the company reported a net loss for the quarter that was wider than last year, despite double-digit revenue growth, hurt by legal settlements of $9 million. The company also provided revenue growth guidance for the third quarter, in line with Street view, and raised revenue outlook for the full-year 2014.

"With our third consecutive quarter of strong EBITDA growth versus prior year, Bankrate's strategy is working. We continued to drive higher revenue for the quarter versus prior year across all of our verticals, with credit cards and insurance revenue growing close to 30%," President and CEO Kenneth Esterow said in a statement.

The North Palm Beach, Florida-based publisher of personal finance content on the Internet reported a net loss of $2.25 million or $0.02 per share for the second quarter, wider than $0.89 million or $0.01 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $14.93 million or $0.15 per share, compared to $10.32 million or $0.10 per share in the year-ago quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 24 percent to $130.66 million from $105.55 million in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $133.25 million. Adjusted revenue was $130.9 million.

Adjusted CPA revenue, credit cards and senior care, increased 34 percent from last year. Excluding the impact of the Caring.com acquisition, CPA revenue grew 29 percent on strong visit growth, strong affiliate traffic, higher credit card issuer marketing activities, higher approval rates and higher CPAs. Caring.com generated $2.3 million in adjusted revenues.

CPL revenue, insurance products, increased about 20 percent, with revenue per lead up about 20 percent. Overall insurance lead and click revenue combined increased by 28 percent.

Hyperlink, or CPC revenue, for the quarter increased 20 percent, with a 52 percent growth in insurance CPC business and 62 percent growth in deposit CPC revenue, partially offset by a 27 percent decline in mortgage CPC revenue.

Income from operations declined to $1.95 million from $5.48 million last year, as operating expenses increased to $82.22 million from $62.52 million from a year ago, including legal settlements of $9.19 million.

"We are particularly pleased to have delivered these results, while also making important long-term investments in our new senior care vertical and in Bankrate's personalization, optimization and mobile capabilities," Esterow added.

Looking ahead to the third quarter, Bankrate expects adjusted revenues in a range of $140 million to $145 million, while analysts project $140.0 million.

For fiscal 2014, the company raised its adjusted revenue guidance to a range of $545 million to $555 million from prior guidance in the range of $540 million to $550 million. Street is currently looking for full-year 2014 revenues of $547.8 million.

The company cited its strong performance in the first half, increased partner mix in banking, and a more modest outlook for insurance volume growth in the second half, as the reason for the guidance hike. RATE closed Thursday's regular trading session at $16.49, down $0.05 or 0.30% on a volume of 0.59 million shares. The stock plummeted a further $2.48 or 15.04% in after-hours trading.