Tree.com Posts Profit, But Much Is Tied to Lender It Sold
In its first full quarter as a "pure-play" lead generation company, Tree.com earned $4.4 million in 3Q, but $4.1 million of that came from discontinued operations, including the mortgage lending business it sold to Discover in the second quarter.
This compares with 2Q12 income of $25.8 million (of which discontinued operations contributed $27.5 million) and 3Q11 income of $13.3 million (where net income from discontinued operations totaled $16.7 million).
In a press statement Doug Lebda, chairman and CEO of the Charlotte-based company, said, “Our third- quarter results reflect strong demand from our network lenders, who readily absorbed the substantial increase in supply of leads available to our exchange following the sale of our mortgage origination business even in this historically low interest rate environment.”
Mortgage lead generation revenue grew by 27% over the third quarter of last year.
Continuing operations contributed revenue of $23.3 million, a 19% improvement from the third quarter of 2011.
Lebda added, “Our financial plan is to grow our top line while maintaining strong variable marketing margin dollars and percent, and we are performing to that plan with nearly $12 million in variable marketing margin, representing a 50% margin, in the quarter."