Whew. If you're looking for a company that's easy to analyze, you best keep on looking past Barry Diller's InterActiveCorp
InterActive reported its third-quarter earnings today, and the release takes 21 pages to spell everything out. What's clear is that total revenues grew 36% to $1.61 billion. It's even easy to see which segments of the business contributed most to the company's sales growth, with Travel revenue jumping 60% to $734.3 million and Electronic Retailing up 17% to $526 million.
Beyond that, though, is where things get sketchier. InterActive management, and Street analysts, focus on several measures of income that exclude certain items, in the hopes of better getting a grip on this miasma of a company. For instance, the First Call estimate for this quarter was for $0.18 in "adjusted earnings per share." InterActive missed that number by a penny.
With the business being built by acquisition after acquisition, there are charges and "special items" galore. It's no wonder, then, that InterActive's management would try to find ways to make its operations appear more transparent by trying to isolate results from ongoing operations. However, when the company then reports "certain unforeseen charges" for its quarter, as it did today, the picture's clouded even further.
InterActive publishes its cash flow statement along with its earnings announcement, which we applaud. Investors can at least check out its cash flow situation independent of the accounting mess created by buying company upon company.
Despite its stable of first-class online properties, investors should make sure they fully understand this InterActive and its incredibly complicated finances before jumping in. Until the picture becomes clearer as to how the company's parts are performing as a whole, InterActive remains something of an enigma, and the market's likely to keep treating it that way.