posted their biggest jump in at least two years after Chief Executive Barry Diller expressed optimism about a turnaround at the struggling HSN retailing unit.
Diller brushed aside a suggestion that New York-based IAC get rid of HSN, which has been a drag on the company. Earlier this year, IAC named former
executive Mindy Grossman to oversee the retail unit, which gets most of its revenue from HSN. That business accounted for 48% of the company's $1.6 billion in second-quarter revenue.
"I think the long term is very good, and I think it's a very key part of the company," Diller said of HSN Tuesday during a conference call with investors after the release of earnings.
Wall Street's frustration with HSN is understandable. The retail business showed a 2% revenue gain in the second quarter, the smallest increase of any IAC unit. Operating profit gained 9% to $47 million.
Diller has given Grossman carte blanche to make big changes at the unit, which has been hurt by poor product selection.
"We have finally hired a senior executive that's really seasoned with wide and deep operating experience," he said. "I recognize that results, not rhetoric, are what you are interested in."
IAC's second-quarter results were better than Wall Street expectations, bucking the trend of disappointments that investors found in other big-cap Internet companies, including
Shares of IAC, whose businesses include
Evite, have dropped 16% this year. That's worse than the big market averages, but better than most other big-cap Internet companies, except for
IAC shares rose $1.28, or 5.4%, to $24.99 in trading Tuesday.