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IAC/Interactive Q3 Profit Beats Estimate; Company to Pay First Regular Dividend (ICAI)

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IAC/Interactive Corp. (NASDAQ: ICAI), an Internet company with over 50 brands serving consumer audiences in more than 30 countries, today reported better than expected third quarter profit. The New York City-based company also said that it will pay its first regular dividend.

IAC/Interactive shares have risen sharply today following the earnings beat. The stock rose to an intra-day high of $43.63, and at last check, it was up 6.57% to $42.18, with volume up from daily average of 950,900 to 1.90 million.

For the third quarter of 2011, IAC reported net income of $65 million, or $0.69 per share, compared with net income of $17.5 million, or $0.16 per share reported for the same period in the previous year. Excluding one-time items, the company reported earnings of $0.56 per share, well above Street estimates of $0.49 per share.


IAC’s third-quarter revenue jumped 25% on a year-over-year basis to $516.9 million. The company ended the quarter with $865 million in cash.

The strong cash position has prompted IAC to pay its first regular dividend. The company said that it would pay a quarterly cash dividend of $0.12 per share.

Barry Diller, Chairman of IAC, said that it is an outdated and somewhat inane concept that high-growth companies should not pay dividends. Diller further said that the company has been growing its earnings consistently, has substantially no debt, and large cash reserves. He added that the company should be and is committed to investing in its businesses wherever prudent and returning a portion of the balance to shareholders.

In a conference call with analysts, Diller said that the company plans to maintain a minimum of $500 of cash on its balance sheet. Diller also said that the company has plenty of resources to buy back stock and to make any acquisitions it thinks should be rational.

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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