ZipRealty Rebounds to Post Profit
Online real estate brokerage ZipRealty Inc. swung to a better-than-expected profit in the first quarter and raised its earnings forecast for the year.
The Emeryville, Calif.-based company, which went public in November, on Tuesday reported net income of $662,000, or 3 cents a share, contrasted with a loss of $115,000, or 19 cents, a year ago.
Analysts, on average, were expecting per-share earnings of 1 cent.
Revenue rose 63% to $17.8 million in the period ended March 31, considered the most sluggish time of year for residential real estate.
“They seem to be executing on plan,” said Derek Brown, an analyst with investment bank Pacific Growth Equities. “And that’s certainly encouraging as we head into the peak spring season.”
ZipRealty has sought to differentiate itself from traditional real estate brokerages by focusing on the growing use of the Internet.
The company gives prospective buyers online access to various multiple listing services. It also refunds home sellers as much as 20% of each sales commission and hires full-time sales agents, not independent contractors.
During the first quarter, the company recorded a 46% increase in customer transactions from a year ago, and sold $832 million worth of real estate. It also ended the quarter with 938 agents, after adding 69 new employees.
“Our goals are to drive significant revenue growth and operating leverage while maintaining solid productivity,” Chief Executive Eric Danziger said in a conference call of analysts.
ZipRealty’s results were helped by rising housing prices and tight inventories of existing homes for sale in the 13 markets it operates in, including Northern and Southern California, Danziger said.
Because of those trends and the better-than-anticipated results, the company raised its full-year guidance to 38 cents to 42 cents a share, from 36 cents to 40 cents. It expects 2005 revenue to reach $97 million to $102 million.
The earnings were released after the close of regular trading. In after-hours trading, ZipRealty shares rose 9% to $14.50. Earlier, the shares fell 12 cents to $13.35 on Nasdaq. The stock has lost 25% this year.
