* Revenue jumps, but restructuring eats into income
* Shares unchanged near $43 after hours
By Alexei Oreskovic
SAN FRANCISCO, Feb 6 IAC/InteractiveCorp's
said that growth in its search business would slow from
the "meteor ride" of the past two years, but it was confident of
double-digit growth for the "foreseeable future."
Shares of IAC were unchanged at about $43 in after hours
trading on Wednesday after the company reported a 28 percent
increase in fourth-quarter revenue, slightly exceeding Wall
Executives at the Web holding company sought to dispel
concerns that industry changes were taking a toll on its search
business, which includes the Ask.com website and accounts for
roughly half of IAC's revenue.
"The growth rates will slow from the meteor ride we were on
in 2011 and 2012, but we've been saying that would happen since
the ride started," said IAC Chief Executive Greg Blatt on a
conference call with analysts on Wednesday. "We're confident
this segment should yield double-digit growth for the
Shares of IAC have been under pressure, falling roughly 20
percent since October, on concerns that recent policy changes at
Google Inc and consumers adoption of mobile devices
would erode revenue in its search business.
Executives said the impact of changes to Google's search
algorithm had not hurt traffic and monetization of IAC's online
proprieties as drastically as some investors feared. And
executives said the company saw significant opportunities to
grow its business among users of smartphones and tablet PCs.
"They went to pains to clear up that confusion," said
Jefferies & Co analyst Brian Fitzgerald. "The takeaway was Q1 is
going to feel some impact from search changes but long-term the
business is not going away."
The company for the first time provided a financial
forecast, projecting that consolidated revenue and operating
income before amortization in the first quarter would grow in
the "strong double digits, high-teens range."
Analysts polled by Thomson Reuters I/B/E/S were looking for
Q1 revenue of $775.1 million, which would represent a roughly 21
percent increase from the year before.
IAC has amassed a wide variety of online properties in the
online search, dating and media markets. In September, IAC spent
$300 million to acquire the About Group from the New York Times
IAC incurred $11.5 million in charges in the fourth quarter,
with $7 million of the charges related to IAC's decision to
cease print publication of Newsweek Daily Beast and to make it
an online-only publication.
Net income for the quarter ended Dec. 31 was $40.7 million,
or 43 cents per share, versus $48.8 million, or 53 cents per
share in the year-ago period. Excluding certain items, IAC said
it had EPS of 70 cents.
IAC Chairman Barry Diller said in response to a question
during the conference call that spinning off any of the
company's assets was always a possibility, but that there were
no such plans at this time.
"We think the best configuration is a consolidated number of
businesses that we think relate to each other," Diller said.
He said the company would continue to buy back stock
opportunistically and to pay a dividend.
IAC's search business increased sales by 30 percent in the
fourth-quarter to $403.6 million. Revenue in IAC's online dating
segment rose 16 percent to $182.6 million.
Overall, IAC's revenue in the fourth quarter was $765.3
million, compared with $596.9 million in the year-ago period and
above the $758.1 million expected by analysts polled by Thomson