There may be a future after all for InsWeb (NASDAQ:INSW). The online provider of insurance leads is posting the first operating profit in its troubled, cash-burning history.

InsWeb earned $0.09 per diluted share for the March quarter, considerably better than the $0.41-per-share deficit it posted a year earlier. Revenues rose 5% higher to $8.1 million.

Maintaining that profitability would be a sweet feat for InsWeb. Because the company has an accumulated deficit of more than $190 million, it will have enough tax loss carry-forwards to offset its potential tax burdens for years.

Until this point, there was little reason to even look at InsWeb as a potential investment. Other sites like The Knot (NASDAQ:KNOT), Bankrate (NASDAQ:RATE), and at one point HouseValues (NASDAQ:SOLD) have more successfully grown earnings in the competitive online lead-generating niche.

The only thing that InsWeb had going for it in recent years was its considerable cash balance, but that proved to be a leafy green trap. Investors lured in by a stock that at times traded for less than its liquidation value were hammered as the greenbacks dwindled.

Date

Cash per Share

12/31/03

$5.26

12/31/04

$3.72

12/31/05

$2.53

12/31/06

$1.65

I know what that sucker trap looks like; it caught me, too. I singled out InsWeb in an article entitled "Five More Stocks Under $10" three years ago. The stock was trading at $4.81, even though it had a cash-per-share balance of $5.26.

Today brings a little redemption to that mistake. The shares soared 65% this afternoon, finally topping the price I initially found so attractive.

The important thing here is that the cash balance improved during the period. The company closed out its quarter with $7.1 million in cash. That may not seem like much, but it's the first time that the company closed out a period with more money than it started. Unfortunately, with just more than 4.4 million shares outstanding now, its cash per share still shrunk to $1.59 over its December balance of $1.65.

"We look forward to fiscal 2007 as a pivotal year in the history of the Company," CEO Hussein Enan said back in December. He wasn't kidding. The profit is nice. The company's decision to back out of the term life-insurance business and sell policies through the same referral system that has fueled its other insurance lines is logical.

Investors may want to wait another quarter or two for validation here, if only because the cash cushion is now so far away.

Bankrate and The Knot are Rule Breakers newsletter recommendations. To see what other companies are disrupting their industries in a good way, take a free 30-day trial to the service today.

Longtime Fool contributor Rick Munarriz can't recall buying insurance online, though he recognizes its usefulness in shopping around. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. HouseValues is a Hidden Gems selection. The Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.