The IAC released its quarterly earnings report this morning and it wasn’t pretty for its LendingTree division.

Overall revenues increased for IAC, but LendingTree took a 38% plunge in revenue in the first quarter.

      Revenue
                                       Q1 2008      Q1 2007      Growth
                                                $ in millions 

    New IAC                            $392.0       $320.7        22%
    Retailing (To be named HSN)         676.9        666.7         2%
    Ticketmaster                        349.0        303.6        15%
    LendingTree                          70.2        113.2       -38%
    Interval                            115.9         86.4        34%

According to Bloomberg:

Most bad news about LendingTree, an online exchange that matches potential borrowers with up to four banks that compete for their business, is already reflected in IAC’s stock price, Bernstein’s Lindsay said.

This is from LendingTree’s press release:

    LENDINGTREE
                                         Q1 2008      Q1 2007     Growth
                                                   $ in millions
    Revenue
        Lending                           $61.8       $100.0       -38%
        Real Estate                         8.4         13.2       -37%
                                          $70.2       $113.2       -38%
    Operating Income Before Amortization
        Lending                          $(1.0)        $3.1        NM
        Real Estate                       (3.9)        (6.6)       40%
                                         $(4.9)       $(3.4)      -44%
    Operating (Loss) Income
        Lending                          $(3.7)        $0.1        NM
        Real Estate                       (5.0)        (8.0)       37%
                                         $(8.7)       $(7.8)      -11% 

    Lending 

Revenue declined primarily due to fewer loans sold into the secondary market and fewer loans closed at the exchange. Revenue from all home loan products declined. Losses reflect a shift to lower margin products, higher costs per loan sold as a result of lower close rates and stricter underwriting criteria. Losses also reflect certain charges aggregating $3.1 million associated with legal and regulatory costs and restructuring initiatives, partially offset by lower marketing and other operating expenses.

    Real Estate

Revenue declines reflect the absence of revenue from the agent network business which closed in December 2007 and fewer closings at the builder and broker networks, partially offset by increased closings at the company owned brokerage. The company owned brokerage, now operating in 14 markets, grew revenue 38% during the period. Losses decreased due primarily to lower marketing expenses and lower administrative costs resulting in part from the restructuring of the business during 2007.

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