* Forecasts first-quarter revenue $62 mln-$63 mln vs est
* Fourth-quarter adjusted earnings $0.19/share vs est $0.07
* Revenue jumps 70 pct to $58.3 mln vs est $54.4 mln
* Shares fall 3 pct in extended trading
(Adds details from conference call, share movement)
Feb 12 Real estate website operator Zillow Inc
warned that near-term profit would be hit due to higher
advertising costs, sending its shares down 3 percent in
The company said it would increase spending on advertising
to $65 million in 2014 from $40 million in 2013.
"While we will forego some profitability in the near-term to
grow our audience market share, the long (term) gain is about
capturing revenue share and expanding profit margins," Chief
Executive Spencer Rascoff said on a conference call, where he
also took questions via Facebook and Twitter.
Zillow said it expected revenue of $62 million-$63 million
for the first quarter, above the average analyst forecast of
The company expects sales and marketing expenses of $36
million to $37 million for the quarter ending March 31. Sales
and marketing expenses were $19.8 million in the year-earlier
Zillow said it expects revenue of $288 million to $294
million for 2014, above the average analyst forecast of $283.9
The company also reported better-than-expected
fourth-quarter revenue and earnings as a recovering U.S. housing
market boosted subscriptions.
Zillow, which gets most of its revenue from subscriptions to
its website from real estate agents, said the number of paid
subscribers rose 64 percent to 48,314 in the quarter.
Revenue jumped 70 percent to $58.3 million.
Net income rose to $2.7 million, or 6 cents per share, in
the fourth quarter, from $549,000, or 2 cents per share, a year
Excluding items, the company earned 19 cents per share.
Analysts on average had expected earnings of 7 cents per
share on revenue of $54.4 million, according to Thomson Reuters
Zillow said average monthly unique users to Zillow.com
increased 57 percent to 54.4 million in the quarter.
The company said the number of people using mobile devices
to access its site nearly doubled, but did not provide numbers.
Zillow's competitors include Trulia Inc, which
operates Trulia.com, and Move Inc, owner of sites such
Zillow's shares closed at $89.85 on the Nasdaq on Wednesday.
They gained 4 percent after the company reported
better-than-expected quarterly results before reversing
direction on the profit warning.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Don
Sebastian and Sriraj Kalluvila)