Zillow posts 3Q profit but outlook drags on stock
SEATTLE (AP) — Real estate website operator Zillow Inc. posted a profit for its third quarter on Monday, reversing a loss a year earlier, as revenue grew sharply. But the Seattle-based company's revenue outlook for the current quarter fell shy of Wall Street's expectations, and its stock fell sharply after-hours.
Zillow earned $2.3 million, or 7 cents per share, in the July-September period. That compares with a loss of $570,000, or 2 cents per share, in the same period a year earlier.
Revenue rose 67 percent to $31.9 million from $19.1 million.
Analysts, on average, were expecting earnings of 7 cents per share on revenue of $31.6 million, according to FactSet.
For the current quarter, Zillow is forecasting revenue of $30 million to $31 million, below Wall Street's expectations of $32.5 million.
The company also said that it is buying Mortech Inc., a Lincoln, Neb.-based software and services company that serves the mortgage industry. The purchase price is $12 million in cash plus 150,000 shares of restricted stock. If the deal is based on Zillow's closing price of $34.37 on Monday, that makes it worth about $17.2 million.
Zillow's stock plunged $7.99, or 23.3 percent, to $26.38 in after-hours trading. The stock had closed down $1.91, or 5.3 percent, at $34.37 in the regular session. That's up about 53 percent since the start of the year.