Zillow forecasts weak revenue on fewer ad displays
(Reuters) - Real estate website Zillow Inc (Z.O) forecast fourth-quarter revenue below analysts' estimates as it expects weakness in its display advertising business, sending the company's shares down 25 percent in after-market trading.
"Fewer people buy homes in the fourth quarter. Therefore, there are fewer display advertising dollars spent," Chief Executive Spencer Rascoff told Reuters.
Zillow, which provides housing price appraisals called "Zestimates," lost one of its larger display advertisers, Foreclosure.com, which would affect display revenue in the near term, Rascoff said.
The company expects fourth-quarter revenue of $30 million to $31 million, compared with analysts' expectations of $32.5 million, according to Thomson Reuters I/B/E/S.
Zillow reported a net income of $2.3 million, or 7 cents per share, in the third quarter, compared with a loss of $570,000, or 2 cents per share, a year earlier.
Revenue jumped 67 percent to $31.9 million.
Display revenue rose 15 percent to $8.3 million.
Analysts had expected a profit of 7 cents per share, on revenue of $31.7 million.
The company said on Monday it would buy mortgage technology company Mortech Inc for $12 million in cash.
Zillow shares were down 22 percent at $26.74 in extended trade. The stock closed at $34.37 on the Nasdaq.
Seattle-based Zillow, which went public July last year, is one of the few technology companies whose shares have managed to trade near their listing price. The stock has gained 61 percent this year.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila)
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