HouseValues Sold Off

Guidance is soft.
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HouseValues (SOLD) posted a mixed fourth quarter and guided sharply lower for the first quarter and 2006. Its shares plunged 28% in after-hours trading.

The Kirkland, Wash., real estate-information company made $4 million, or 15 cents a share, for the quarter ended Dec. 31, up from the year-ago $1.9 million, or 8 cents a share. Revenue rose to $25.2 million from $14.4 million a year earlier. Analysts surveyed by Thomson Financial were looking for an 11-cent profit on sales of $25.8 million.

"2005 was the sixth year of extraordinary growth at HouseValues," said CEO Ian Morris. "2006 will be another year of growth and investment as we extend our leadership position and continue to build deeper relationships with consumers as well as our real estate and mortgage professional customers."

The company said it plans to make significant investments this year in HomePages and The Loan Page, and these investments are reflected in its business outlook.

For the quarter ending next month, HouseValues expects to make 3 or 4 cents a share on revenue of $25.5 million to $26 million. Those earnings include 3 cents a share worth of stock-option costs. Analysts were looking for a 14-cent profit on sales of $29 million.

For the year ending in December, the company expects to make around 27 cents a share, after 12 cents worth of stock-option expense, on revenue of $110 million or so. Analysts were looking for 69 cents a share on revenue of $130 million.

HouseValues shares were halted late Tuesday after falling 25 cents to $13.50. When trading resumed they fetched $9.65, down $3.85.