Zip Realty (ZIPR) plunged 16% late Thursday after the real estate brokerage missed third-quarter estimates and slashed guidance.
The Emeryville, Calif., company made $2.9 million, or 11 cents a share, up from the year-ago $1.3 million. Revenue rose to $28 million from $18 million a year ago. Analysts were looking for 13 cents on $28 million.
For the fourth quarter, the company forecast a 3-cent profit on sales of $22 million where analysts were expecting 12 cents and $28 million.
"It is important to appreciate that our fourth quarter and preliminary 2006 guidance is being provided in the context of what we believe to be a transitioning market, slowly shifting the advantage from sellers to buyers," said CEO Eric Danziger. "Evidence of this shift is seen in rapidly rising inventory levels in September and slightly declining median selling prices across our markets for the past two months. While we cannot predict the length of this transition phase, we expect the industry will still post record, or near record, volumes this year with a solid forecast for 2006. Given the size and historical resilience of the residential real estate industry we are confident in our ability to increase market share and grow our business over the long term, particularly as the market moves toward equilibrium."Zip slid $2.17 to $11.