IAC beats Wall Street view, posts loss on charges
NEW YORK (Reuters) - Internet conglomerate IAC/InterActiveCorp posted quarterly results on Wednesday that beat Wall Street forecasts, although charges for its online mortgage and catalog units resulted in a net loss.
IAC, run by media veteran Barry Diller, plans to spin off its HSN cable shopping network, Ticketmaster box office service, Interval time-share network and LendingTree mortgage broker into four publicly traded companies in early August.
The remaining IAC will comprise web media and subscription businesses like its Ask.com search site and Match.com online dating service, respectively.
"We're almost there with the spins," Chief Executive Diller said on a conference call.
"Focusing on consolidated results is only about the past, and I would think it far more productive for the future to analyze and judge the entities on their own merits," he said.
In what will probably be the company's last consolidated earnings report, IAC reported a second-quarter net loss of $421.6 million, or $1.51 per share, compared with a year-earlier profit of $94.6 million, or 31 cents per share.
Excluding special items, earnings were 35 cents per share, ahead of the analysts' average forecast of 31 cents, according to Reuters Estimates.
Special items included a $300 million asset impairment charge for the Cornerstone catalog unit and a $166 million charge for the online mortgage unit, which will be called Tree.com in the spin-off.
Revenue rose 7 percent to $1.6 billion, in line with analysts' estimates.
"The HSN numbers looked good and the Ask numbers looked good," said Alan Gould, an analyst at Natixis Bleichroeder. "We like the New IAC."
IAC shares fell 1.6 percent to $17.66.
Several analysts estimate the spun-off IAC companies will eventually be worth more to investors than the current combined structure, but have warned the new shares could trade at a significant discount in their first year on the market.
"New IAC" posted revenue growth of 11 percent, helped by a search advertising partnership with Google Inc, and said its operating loss narrowed to $18.4 million. Ask.com posted revenue growth per search even without the Google deal, and Diller said he expected to invest more in marketing of the site beginning late in the fourth quarter.
HSN revenue without its troubled Cornerstone business rose 11 percent and operating profit rose 23 percent to $26.7 million. Including Cornerstone, revenue rose 2 percent, and the unit posted an operating loss of nearly $272 million.
Ticketmaster revenue rose 30 percent, but operating profit fell 10 percent to about $45 million.
(Editing by Derek Caney, Lisa Von Ahn and Leslie Gevirtz)
