IAC/InterActive Q4 Profit Declines, But Results Beat View

(RTTNews) - IAC/InterActiveCorp. (IACI) on Tuesday reported a 9 percent decline in profit for the fourth quarter from last year, as double-digit revenue growth was more than offset by higher expenses. However, both revenue and adjusted earnings per share for the quarter beat analysts' estimates.

Net earnings attributable to IAC shareholders for the fourth quarter declined to $70.17 million or $0.88 per share from $76.92 million or $0.88 per share in the previous year quarter.

Excluding items, adjusted earnings for the quarter were $1.00 per share, compared to $1.04 per share in the year-ago period. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.86 per share for the quarter. Analysts' estimates typically exclude special items.

According to IAC, net income and adjusted net income for the latest quarter reflect an after-tax gain of $4.9 million related to the sale of Urbanspoon, positively impacting both earnings per share and adjusted earnings per share by $0.05.

Revenues for the quarter grew 15 percent to $830.75 million from $724.46 million in the prior year. Analysts expected revenue of $800.90 million for the quarter.

The company said the increase in revenues was driven by solid growth across all four segments.

Match Group revenue for the quarter climbed 15 percent from last year, driven by the contributions from The Princeton Review and FriendScout24 that were both acquired in August 2014. Search & Applications revenue increased 9 percent, driven by 22 percent growth in Websites revenue due mainly to strong growth at About.com.

In the media segment, revenue increased 52 percent from last year, due principally to the contribution from IAC Films and strong growth at Electus as well as Vimeo. Vimeo grew revenue nearly 30 percent and surpassed 560,000 paid subscribers.

eCommerce segment revenue increased 18 percent. HomeAdvisor revenue climbed 32 percent, with a 24 percent increase in domestic service requests.

Total operating costs and expenses rose 18 percent from the year-ago period to $720.38 million.

For fiscal 2014, net earnings attributable to IAC shareholders rose to $414.87 million or $4.68 per share from $285.78 million or $3.29 per share in the prior year. Adjusted earnings for the year were $2.55 per share, compared to $4.11 per share last year.

Revenue for the year grew 3 percent to $3.11 billion from $3.02 billion in the previous year.

Street expected the company to earn $2.42 per share for the year on revenues of $3.08 billion.

Looking ahead to the first quarter, IAC forecasts EBITDA to decline slightly year over year.

For fiscal 2015, IAC expects "some decline" in overall revenue, primarily due to Ask.com in Websites, but still projects EBITDA of more than $300 million.

IAC declared a quarterly cash dividend of $0.34 per share, payable on March 1, 2015 to stockholders of record at the close of business on February 15, 2015.

IACI closed Tuesday's regular trading at $64.06, up $1.46 or 2.33 percent on a volume of 1.46 million shares. However, in after-hours, the stock declined $3.06 or 4.78 percent to $61.00.