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IAC/InterActiveCorp Beats on Both Top and Bottom Lines

By Seth Jayson – Updated Apr 7, 2017 at 12:11PM

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Just the facts, Fool.

IAC/InterActiveCorp (Nasdaq: IACI) reported earnings on Oct. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), IAC/InterActiveCorp beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped significantly.

Gross margins shrank, operating margins grew, net margins contracted.

Revenue details
IAC/InterActiveCorp logged revenue of $714.5 million. The 15 analysts polled by S&P Capital IQ expected to see sales of $693.1 million on the same basis. GAAP reported sales were 38% higher than the prior-year quarter's $516.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.71. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.67 per share. GAAP EPS of $0.43 for Q3 were 38% lower than the prior-year quarter's $0.69 per share. (The prior-year quarter included -$0.04 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 63.3%, 20 basis points worse than the prior-year quarter. Operating margin was 10.9%, 40 basis points better than the prior-year quarter. Net margin was 5.7%, 690 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $729.3 million. On the bottom line, the average EPS estimate is $0.80.

Next year's average estimate for revenue is $2.74 billion. The average EPS estimate is $2.81.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 340 members out of 378 rating the stock outperform, and 38 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 111 give IAC/InterActiveCorp a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IAC/InterActiveCorp is outperform, with an average price target of $58.67.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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