Updated from 8:17 a.m. EST
swung to a profit in the third quarter on a 36% year-over-year jump in revenue, but its adjusted bottom line was slightly weaker than analysts expected and the company guided earnings down for the full year.
For the quarter ended Sept. 30, the Barry Diller-led Internet juggernaut earned $18.7 million, or 2 cents a share, compared with a loss of $36.6 million, or 8 cents a share, last year. Revenue was $1.61 billion in the latest quarter compared with $1.19 billion a year ago.
After being cobbled together over the last two years primarily via acquisitions, InterActiveCorp's earnings statements feature a hodgepodge of profitability measures and other obscure economic gauges. Analysts try to predict something called adjusted net income, a number that excludes the company's large noncash compensation expense, amortization cost and various other inconvenient items. That amount came out to $130 million, or 17 cents a share, in the third quarter.
Analysts surveyed by Thomson First Call were forecasting adjusted net income of 18 cents a share on revenue of $1.55 billion.
For all of 2003, InterActiveCorp now expects earnings of 3 cents to 5 cents a share and adjusted net income of 72 cents to 75 cents a share. Analysts were forecasting adjusted net income of 77 cents a share. That shortfall sent the stock down $2.22, or 6%, to $34.78 in early trading.
One reason for weak guidance was the termination of a marketing pact between InterActiveCorp's Hotels.com unit and
Travelocity Web site, a development that InterActive said in September would be "marginally dilutive" to earnings this year and next. It also cited the impact of various one-time items, including the cost of writing down a satellite contract and a charge for a bond buyback.
InterActive's big top-line increase was driven by a 60% year-over-year jump in its travel segment to $734 million, a 17% jump in eletronic retailing to $526 million, a 10% jump in ticketing to $177 million and a 44% jump in its personal ads segment to $48.3 million.