Bankrate Misses Estimates, but Lifts Outlook

Bankrate (RATE Quote) said its net income for the fourth quarter increased 5% from a year earlier, but the company's adjusted per-share results fell short of Wall Street's estimates.

Simultaneously, Bankrate said it has bought the assets of two companies, InsureMe, of Englewood, Colo., and Lower Fees, of Westlake Village, Calif.

InsureMe operates a Web site and a network of affiliates that offer consumers insurance rates for auto, home, life, health and long-term care. The purchase price was $65 million. Lower Fees operates feedisclosure.com, a site that provides data on mortgage transactions and closing fees. Those assets were acquired for $2.85 million. Bankrate could pay additional cash in both cases if certain targets are met.

Bankrate, which owns Bankrate.com, an Internet consumer banking marketplace, said that because of the acquisitions and owing to what it described as the strength of its core business, it has lifted its forecast for 2008. Now, the North Palm Beach, Fla., company is expecting revenue of between $167 million and $172 million. Analysts are currently calling for a top line of $142.8 million.

Still, shareholders weren't impressed, and Bankrate dropped 8.9% to $49.02 in extended-hours trading, with the earnings shortfall contributing to the selling. In the regular session, the stock fell 5.6% to $53.68.

For the fourth quarter, total revenue increased 22% from a year earlier to $25.2 million. Earnings rose to $4.1 million, or 21 cents a share, from last year's $3.9 million and 21 cents a share.

Excluding items, Bankrate would have earned 33 cents in the latest quarter, whereas on average, analysts surveyed by Thomson Financial were looking for 39 cents.

"It was an unusual quarter in that we had two record months followed by a soft December, when several display advertisers cancelled booked business in that month as a result of anxiety in the mortgage and financial sectors," said Thomas Evans, president and CEO at Bankrate, in a prepared statement. "However, January's activity generated record traffic and click volume and 2008 is off to a great start."

Total revenue for the year was $95.6 million, an increase of 20% from 2006, and net income doubled to $20.1 million from $10 million the previous year.