Zillow Inc., the real estate website that’s acquiring smaller rival Trulia Inc. for $3.5 billion, reported second-quarter sales that topped analysts estimates as traffic increased and more agents used its home-listing service.
Sales rose 68% to a record $78.7 million, from $46.9 million a year earlier, Zillow said today in a statement. That compared with analysts’ average prediction of $76.6 million, according to data compiled by Bloomberg.
The Seattle-based company, the biggest U.S. website for real estate agents and prospective buyers, also raised its annual sales forecast as advertising and listing revenue surges. The all-stock deal for Trulia, unveiled last week, is part of Chief Executive Officer Spencer Rascoff’s goal of creating a family of Web brands under the Zillow name that could span home sales to rentals to mortgages.
“Agents are increasingly looking to Zillow as a lead-generation tool,” said Ronald Josey, an analyst at JMP Securities, who rates the stock the equivalent of a buy. “As long as these things continue I think that should bode well for the results.”
Zillow shares fell 2.6% to $141.06 at the close in New York. The stock has gained 73% this year.
The company’s second-quarter net loss was $10.5 million, or 26 cents a share, compared with a loss of $10.2 million, or 30 cents, a year earlier. Excluding certain costs, the per-share loss in the recent period was 5 cents, compared with analysts average prediction for a loss of 4 cents.
Third-quarter sales will rise to $87 million to $88 million, exceeding the average analysts’ estimate for $82.7 million. Revenue for the full year will be $321 million to $323 million, Zillow said today, increasing its forecast from a prior range of $304 million to $308 million.
Last week, San Francisco-based Trulia reported second- quarter revenue of $64.1 million, beating the average analyst estimate of $62.3 million, according to data compiled by Bloomberg.
A combined Zillow and Trulia would be positioned to capture a larger share of digital real estate ads as more people turn to the Web for house-hunting and as property agents deploy more marketing dollars on the Internet. The companies estimate that together they would now have less than 4% of the $12 billion a year real estate advertising market in the U.S.
Trulia will be the largest acquisition for Zillow, according to data compiled by Bloomberg. The deal’s completion is contingent on regulators’ approval.