Web conglomerate IAC/InterActiveCorp Wednesday said its first-quarter profit rose nearly 80 percent as its international operations and hotel unit fueled its travel business.
IAC, which will soon complete its acquisition of Web search provider Ask Jeeves Inc. and spin off Expedia Inc. and other travel assets, said first-quarter net income rose to $68.9 million, or 9 cents a share, from $38.3 million, or 5 cents, a year earlier.
Chief Executive Barry Diller said IAC would not be able to grow as fast every quarter.
"It (the earnings report) does indicate the level of growth we can deliver in any given one," he told analysts. "All our businesses are now making strides that are measurable and quantifiable and are consistently hitting the dozens of key markers that we track every which way."
One chronic loss-maker, local services unit CitySearch, will break even in the next quarter, Diller predicted.
The new IAC will also include such properties as the Home Shopping Network, Ticketmaster, dating site Match.com and online mortgage provider LendingTree.
Adjusted net income was 22 cents a share for the quarter ended March. Revenue rose 14 percent to $1.65 billion from $1.44 billion.
On average, analysts had predicted first-quarter net income of 10 cents a share and adjusted earnings, excluding some items, of 20 cents a share on revenue of $1.63 billion, as compiled by Reuters Estimates.
Operating income before amortization rose 30 percent, to $253 million.
"I think in general the (profit) margins held up better than most of the Street was estimating," said Martin Pyykkonen, senior analyst at Janco Partners.
He added that the strength of the company's travel business will be all the more visible when IAC spins off Expedia.
"This is a company that knows how to compete in the travel business," Pyykkonen said. "The travel business and the new IAC are going to have somewhat comparable profit levels."
IAC said its operating income from its travel unit rose 53 percent to $129.9 million. The company's operating income from its electronic retailing unit was up 58 percent at $46.2 million. Operating income from IAC's ticketing unit slipped 2 percent to $40 million.
Piper Jaffray analyst Safa Rashtchy in a research note said that the results slightly exceeded expectations. "While revenue growth remains anemic for now, we believe this is already priced into IAC shares," he wrote.
Chief Financial Officer Tom McInerney predicted revenue growth in the "high single digits" and net income in the "mid teens" in the second quarter.
For the second quarter, analysts had seen the company posting per-share net income of 14 cents and earnings excluding items of 24 cents a share on revenue of $1.7 billion.
IAC said late last year it would spin off Expedia, Hotels.com and other travel properties in the coming months, arguing that its stock price has been depressed by a perception that IAC is focused solely on travel.
In March, IAC announced its plan to buy Ask Jeeves for nearly $2 billion to knit together its diverse holdings and boost revenue from search advertising -- one of the fastest growing businesses on the Web.
The company said revenue in the new Expedia would have been $485 million in the first quarter. The new IAC's revenue would have been $1.17 billion.
