Out of the Gate: Move stock slides on downgrade

Shares of Move Inc., which offers Web-based real estate listings, fell Monday morning after a Needham analyst downgraded the company, saying its costs will stay high.

Mark May downgraded the stock to "Hold" from "Buy," noting that the company absorbed $3 million, or 2 cents per share, in one-time charges in the first quarter, which translated to 2 cents per share. Revenue fell at most of its businesses, he added, and May thinks revenue growth will be disappointing in the coming quarters.

The Westlake Village, Calif., company reported its first-quarter results late Thursday. Move lost $3.4 million, or 3 cents per share for the period, while posting revenue growth of 2 percent, to $70.4 million. A year earlier, the company posted a profit of $1.4 million _ break-even on a per-share basis _ on $68.9 million in revenue.

Analysts expected a loss of 1 cent per share on $72.2 million in revenue. Analyst estimates typically exclude one-time items.

The company said the $3 million in costs were connected to the closing of a "nonstrategic business," along with the opening of a product development center.

Move said traffic rose 15 percent in the first quarter, and the company's sites averaged 9.8 million unique users per month.

The stock climbed 7.4 percent Friday but gave up those gains and more in Monday trading, falling 31 cents, or 9.3 percent, to $3.03.

Three analysts now rate Move shares "Neutral" or the equivalent, while four give "Buy" ratings.