MOVE Reports Inline Q4 Results
Move (MOVE: 2.00 +0.50%) reported fourth quarter 2008 results after the close yesterday that were inline with Wall Street’s expectations. The company reported EPS of ($.02) which matched analyst expectations. However, revenue came in at $57.5 million underperforming Wall Street’s consensus estimate of $60.9 million.
Key Highlights
The difficult economic environment weighed on top-line performance, but management has taken steps to adjust their cost structure. Other highlights include:
- Revenues declined 8% y/y to $57.5 million
- Adjusted EBITDA dropped 25% to $7.3 million
- Net loss improved to $3.2 million from $5.3 million in Q4 2007
- Exited the quarter with $109 million in cash & equivalents
“2008 was an eventful year for Move and for our industry, and I believe we enter the new year positioned to continue our market leadership in online real estate,” said Steve Berkowitz, Move’s CEO. “As we reshaped our external profile, relaunching our websites to better serve consumers and real estate professionals, we also focused internally on our efficiency as an organization, reducing operating expenses by $20 million and divesting underperforming businesses to improve our bottom line performance. While we still face the challenges of a deteriorating housing market, continuing challenges in the mortgage and credit markets, and global economic uncertainty, I am excited to step into the CEO role and help take Move to the next level of financial and operational performance.”
Earnings Analysis
While top-line revenues were below consensus expectations, revenues only declined 6% from Q3 performance. Given the strong economic headwinds, we feel that is a fairly decent performance. While we don’t believe the housing market will show any real recovery until the spring of 2010, MOVE is clearly making the “moves” necessary to align their business to take advantage of a recovery in the real estate markets.
Share Performance
Move’s shares are down in early morning trading on the earnings news – dropping 2% to $1.30.
Recommendation: It’s clear that the housing market is not showing any signs of recovering in the short term. In addition, the declining online advertising environment will continue to weigh on MOVE’s 2009 performance. Therefore, we believe there will be more attractive opportunities to take a position in this stock as the year progresses.
At the time this article was published, the author did not have a financial position in any of the stocks mentioned in this article.
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