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Lending Tree (TREE) Q2 Earnings Beat, Stock Dips on Weak View

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Lending Tree, Inc. (TREE - Free Report) reported adjusted net income per share of 58 cents in second-quarter 2022.  The Zacks Consensus Estimate was pegged at a loss of 4 cents. The reported figure compares unfavorably with an income of 76 cents reported in the prior-year quarter.

Amid the uncertain macro-economic environment, the company trimmed its 2022 guidance. Likely reflecting this, the stock lost 6.3% following the release of the results. Second-quarter results of Lending Tree were adversely impacted by a decline in total revenues and high expenses. Nonetheless, cash and cash equivalents improved while continued recovery in TREE’s consumer segment business buoyed the results.

LendingTree reported a net loss from continuing operations of $8 million or 63 cents per share against net income of $9.8 million or 71 cents per share reported in the year-ago quarter.

Revenues Decline, Expenses Rise

Total revenues were down 3% year over year to $261.9 million in the second quarter. The downside primarily stemmed from a decline in Home and Insurance segment revenues. Nonetheless, the reported figure marginally surpassed the Zacks Consensus Estimate by 0.10%.

Total costs and expenses were $265.9 million, up 2.4% from the prior-year quarter. The rise chiefly resulted from a rise in general and administrative expenses and an increase in product development.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $28.5 million, down 25% year over year. The variable marketing margin was at $90.8 million, down 8%.

As of Jun 30, 2022, cash and cash equivalents were $279.1 million, up from $251.2 million as of Dec 31, 2021. Long-term debt was $813 million, up from the prior-quarter figure of $565 million. Total shareholders' equity, as of Jun 30, 2022, was around $350.5 million, up from $340.8 million sequentially.

Outlook

For third-quarter 2022, total revenues are estimated to be $235-$245 million. Adjusted EBITDA and the variable marketing margin are anticipated to be $2-$8 million and $64-$74 million, respectively.

For 2022, total revenues are estimated to be $985-$1,015 million, indicating a year-over-year decline of 8-10%. Adjusted EBITDA is anticipated to be $75-$85 million, suggesting a 37-44% fall year over year. The variable marketing margin is expected to be $325-$345 million.

Conclusion

The company’s total revenues were affected mainly by the decline in home segment revenues. It has also reduced the full-year guidance due to an uncertain environment. Nonetheless, the company remained focused on maintaining the balance between near-term profitability and aligning it for long-term success.

LendingTree, Inc. Price, Consensus and EPS Surprise

LendingTree, Inc. Price, Consensus and EPS Surprise

LendingTree, Inc. price-consensus-eps-surprise-chart | LendingTree, Inc. Quote

Currently, LendingTree carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

Washington Federal’s (WAFD - Free Report) third-quarter fiscal 2022 (ended Jun 30) earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 79 cents. The figure reflects a year-over-year jump of 49.2%.

Results were primarily aided by higher revenues and improving loan balances. However, an increase in expenses and higher provisions were the undermining factors for WAFD.

Commerce Bancshares Inc.’s (CBSH - Free Report) second-quarter 2022 earnings of 96 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line, however, plunged 27.3% from the prior-year quarter.

Results benefited from an improvement in net interest income, a rise in loan balance and a modest increase in non-interest income. However, an increase in non-interest expenses and higher provisions were the major headwinds for CBSH.


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