IAC profit falls 85%; sales rise 8%

Barry Diller’s media conglomerate, IAC/InterActiveCorp, which includes Home Shopping Network, Ticketmaster and CitySearch, said Tuesday that hefty charges had pushed down profit by 85% in the fourth quarter but revenue rose in each of its divisions.

Net income after paying preferred dividends dropped to $16.7 million, or 5 cents a share, in the three months that ended Dec. 31 from $113.1 million, or 33 cents, a year earlier.

Excluding a $214-million charge related to the company’s entertainment publications segment, the company posted adjusted profit of $211.6 million, or 67 cents a share, up 21% from $174.3 million, or 50 cents, in the same period a year earlier. Revenue rose 8% to $1.82 billion.

Analysts expected earnings of 53 cents a share, according to a survey by Thomson Financial. Those estimates typically exclude one-time items. Sales were expected to come in at $1.87 billion, according to Thomson.

Shares of IAC fell 55 cents, or 1.4%, to $38.72.

Although revenue rose slightly in retailing, the company’s biggest division, Diller warned investors that the shopping network would not see its bottom line improve this year.

Its media and advertising segment, which includes search engine Ask.com, did better.

IAC said continued growth in queries and revenue per query at Ask.com and across most other search-related properties contributed to revenue growth of 46% in the media and advertising sector. Diller has said Ask.com should be seen as the thread to tie together the conglomerate’s varied Internet assets.

Goldman Sachs analyst Anthony Noto said annual profit growth in the next three years is expected to be about 10%.

“We continue to believe that Ask.com remains the main swing factor in our long-term growth forecast,” Noto wrote in an investor note Tuesday.

Diller said that after a “hunt and peck” approach to adopting new Ask.com features in 2006, “we’re much more sure about what needs to be done in 2007.”