Update at 8:12 a.m. PST: Analyst comments and stock price added.
InterActiveCorp turned a profit in the fourth quarter but took a 7 percent revenue hit, amid a sharp downturn in its advertising and media business, the company said Tuesday.
Barry Diller's media conglomerate reported revenue of $351 million in the quarter, down from $378.9 million in the same quarter a year earlier. That performance missed Wall Street expectations of $368 million, analyst Imran Khan of J.P. Morgan said in a note.
The company, however, posted a profit of $227.4 million, or $1.57 a share, in the quarter, compared with a net loss of $369.9 million, or $2.53 a share, during the same period a year ago.
But when excluding the sale of one of its investments and the write-down of other investments, IAC posted a profit of 18 cents a share. Analysts were expected a profit of 20 cents a share on that basis, Khan said.
IAC was up less than 1 percent to $14.94 a share in morning trading.
During the quarter, the company's media and advertising businesses, such as Ask.com, Fun Web Products, Dictionary.com, and Citysearch, posted revenue of $183.7 million, a 19 percent decline compared with the year-ago quarter.
Khan's note also commented on IAC's weakness in media and advertising:
Revenue reflects a significant decline in network revenue, which we believe is due to increased competition from Google with this business line. We think other companies with similar exposure could also show weakness. Query declines at Ask.com reflect significantly lower marketing spend in the period. Revenue per query also declined due to fewer clicks per visit.
IAC attributed a portion of that decline to scaling back on some of its partnerships after it renewed its partnership with Google.
IAC's Match.com revenue fell a modest 3 percent to $88.1 million over the same period a year earlier. Despite the revenue decline, worldwide subscriber growth increased by 5 percent in the quarter, reaching its highest level of paid membership.
The company did post double-digit revenue growth in its ServiceMagic.com business and emerging businesses, such as Shoebuy.com, Pronto.com, Gifts.com, and InstantAction.com.