LendingTree ( TREE Quick Quote TREE - Free Report) depreciated 11.4% following the release of first-quarter 2021 results. The company reported adjusted net income per share of 18 cents in the quarter, slumping 85% from the $1.12 reported in the prior-year quarter. The Zacks Consensus Estimate was pegged at a loss of 21 cents.
The company’s performance was adversely impacted by lower consumer revenues on the coronavirus crisis, added by elevated expenses and a weak cash position. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reflect a decline from the prior-year quarter.
However, current low rates’ impact on mortgage-related sources of revenues is expected to support financials in the upcoming quarters.
The company reported GAAP net income of $19.3 million or $1.37 per share compared with the $19 million or $1.34 in the year-ago quarter.
Revenues Decline, Expenses Rise
Total revenues slid 4% year over year to $272.8 million in the first quarter. This downside primarily stemmed from lower consumer revenues. The reported figure, however, surpassed the Zacks Consensus Estimate of $265.8 million.
Total costs and expenses came in at $274.7 million, up 4.7% from the prior-year quarter. This upswing chiefly resulted from a rise in selling and marketing expense, general and administrative expense, cost of product development, depreciation costs and change in fair value of contingent consideration.
Adjusted EBITDA totaled $30.7 million, down 32% from the $44.9 million reported in the year-earlier quarter. Variable marketing margin came in at $89 million, down 9% year over year.
As of Mar 31, 2021, cash and cash equivalents were $162.1 million, down 4.6% from Dec 31, 2020. Long-term debt was up 1.3% from the prior-year end to $619.5 million. Total shareholders' equity was $395.4 million, up 8.4%.
Concurrent with the March-end quarter results, management issued second-quarter 2021 estimates.
Total revenues of $263-$273 million projected. Adjusted EBITDA anticipated in the $27-$31 million band. Variable Marketing Margin projected at $86-$92 million. Conclusion
LendingTree put up a disappointing show during the January-March period in terms of earnings. The company’s inconsistent quarterly performance, unsustainable capital-deployment activities and reduction in consumer revenues are near-term headwinds.
Nonetheless, the bank’s declining dependence on mortgage-related sources of revenues and various opportunistic acquisitions over the past several years are likely to continue aiding financials and help diversify revenues.
Currently, LendingTree carries a Zacks Rank #3 (Hold). You can see
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