Zillow Inc. (Z:US), operator of the largest real estate information website, posted a record decline after forecasting fourth-quarter revenue that trailed analysts’ estimates.
Sales this quarter will be $30 million to $31 million, up from $19.9 million a year earlier, the Seattle-based company said in a statement yesterday. That’s lower than the $32.4 million average estimate of analysts, according to data compiled by Bloomberg.
Zillow, which first sold shares to the public in July 2011, faces increased competition from Trulia Inc. (TRLA:US), the online real estate site that went public in September. To maintain growth and diversify its product offerings, Zillow is making acquisitions (Z:US), and announced yesterday the purchase of financial software company Mortech Inc. for $12 million in cash and 150,000 shares of restricted stock.
Revenue in the third quarter jumped 67 percent to $31.9 million from $19.1 million a year earlier. The company swung to a profit, recording net income of $2.33 million after reporting a loss of $570,000 a year earlier.
Zillow plunged (Z:US) as low as $27.71 and was down 18 percent to $28.02 as of 10:02 a.m. in New York. It had climbed 72 percent since the initial public offering through yesterday, while shares of Web companies including Facebook Inc. (F:US), Groupon Inc. and Zynga Inc. (ZNGA:US) have tumbled since their IPOs.
Trulia is scheduled to report third-quarter results tomorrow. The San Francisco-based company has gained (TRLA:US) 31 percent since its initial public offering on Sept. 19.
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