Updated from 4:34 p.m. to include exclusive comments from CEO interview.
The company, which posted an in-line profit for the September-ended third quarter, forecast revenue of $30 million to $31 million for the fourth quarter. The current average estimate of analysts polled by Thomson Reuters is for revenue of $32.5 million in the December-ended period.
Zillow also announced an agreement to acquire Mortech, a privately held mortgage software and services company based in Lincoln, Neb., for approximately $12 million in cash and 150,000 shares of restricted stock.In an exclusive interview with TheStreet, Rascoff talked up the acquisition. "The nice thing about this category is there's 15 years of virgin powder we're skiing down here. There's been no industry leader or strategic wherewithal looking at these targets." Rascoff said the Mortech deal is likely to close later this year, but would not discuss when he expects the transaction to be accretive to Zillow earnings. Concerning the share price slump in after-hours, Rascoff said the revenue weakness in part reflects seasonal softness in Zillow's display business. Rascoff also said Zillow is sacrificing revenue from its Foreclosures.com property in the short-term, but that he believes this is the right long-term decision for the company. The stock was last quoted at $26.46, down 23.01%, on volume of more than 900,000, according to Nasdaq.com. For the third quarter, Zillow posted a profit of $2.3 million, or 7 cents a share, on revenue of $31.9 million, an increase of 67% from last year's equivalent quarter. The average analysts' view was for earnings of 7 cents a share on revenue of $31.7 million. A bright sport for the company was revenue from its marketplace business, which rose 99% year-over-year to $23.6 million. "Zillow had another great quarter with record usage across mobile and Web," said Spencer Rascoff, the company's CEO, in a press release. "In fact, we reached a major milestone recently, topping 1 billion home views on Zillow Mobile through the first three quarters of 2012." Zillow shares finished Monday's regular session at $34.37, down 5.3%. Interested in more on Zillow? See TheStreet Ratings' report card for this stock. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Commodity_Bull
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV