IAC (IAC) Reports First Quarter Loss, Highest Revenue Estimate

IAC (IAC) came out with a quarterly loss of $2.06 per share versus the Zacks Consensus Estimate of a loss of $1.10. For comparison, a year ago the loss was $0.56 per share. These numbers have been adjusted for one-off items.

This quarterly report showed an earnings surprise of -87.27%. A quarter ago, it was expected that Y would post a loss of $0.37 per share when it actually produced a loss of $0.05, delivering a surprise of 86.49%.

Over the last four quarters, the company has surpassed consensus EPS estimates only once.

IAC, which belongs to the Zacks Diversified Operations industry, posted revenues of $1.08 billion for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 2.62%. For comparison, year-ago revenues were $1.33 billion. Over the last four quarters, the company has topped consensus revenue estimates only once.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

IAC shares are up about 22% year-to-date compared to the S&P 500’s gain of 7.8%.

What’s next for IAC?

While IAC has outperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the trend in estimate revisions for IAC is favorable. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. We can therefore expect that the company’s shares will outperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.71 on revenue of $1.17 billion for the coming quarter and -$2.25 on revenue of $4.66 billion for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Diversified Operations is currently in the top 19% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Live Ventures Incorporated (LIVE), another company in the same industry, is yet to release results for the quarter ending March 2023. The results are expected to be released on May 11.

The company is expected to post quarterly earnings of $2.21 per share in its upcoming report, which would represent a year-over-year change of -54.3%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Live Ventures Incorporated’s revenue is expected to be $100 million, up 43.5% from the same quarter last year.

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