May 3 (Bloomberg) -- IAC/InterActiveCorp, the Internet and media company assembled by billionaire Barry Diller, said first- quarter profit rose 32 percent on increased concert ticket sales at its Ticketmaster unit.

The shares fell the most in almost three years after earnings decreased at the company's HSN shopping and LendingTree mortgage units.

Net income jumped to $62.1 million, or 20 cents a share, from $47.2 million, or 14 cents, a year earlier, IAC said today in a statement. Revenue climbed 10 percent to $1.59 billion.

Ticketmaster, which sells the majority of U.S. sports and concert tickets, boosted sales from performances by artists such as The Police and Kenny Chesney. Retailing profit declined 11 percent as customers paid less on average and returned more products at the HSN television channel and Internet site.

HSN and Lending Tree ``performed poorly,'' Diller said today on a conference call with analysts and investors.

IAC's profit may be lower in the second quarter, the company said without being more specific. Analysts had estimated earnings excluding some expenses of 37 cents a share. A year earlier, New York-based IAC earned 32 cents.

Shares of IAC fell $2.49, or 6.5 percent, to $36.10 at 4:04 p.m. in Nasdaq Stock Market composite trading, the biggest decline since August 2004. They have gained 26 percent in the past 12 months.

Mortgage, Retail

Operating profit at LendingTree fell to about break-even from earnings of $9.1 million a year earlier as revenue fell 12 percent to $100 million.

Existing home sales in March fell 11 percent from a year earlier, according to the National Association of Realtors.

``The market's changed, margins are lower and we need to bring costs in line with reality,'' President Douglas Lebda said on the call.

Retailing sales rose 2.4 percent to $787.6 million, the smallest gain among all units, as customers paid less on average and returned more products at HSN, which reaches 89 million U.S. households, and its companion Internet site.

That was less than the $814 million estimated by Heath Terry, an analyst at Credit Suisse.

``HSN must be fixed a little bit,'' said Jean-Luc Nouzille, portfolio manager at Los Angeles-based Bristlecone Value Partners, which manages $570 million in assets. ``They've made some management changes to address that.''

Nouzille estimated that HSN's profit margins are as much as 30 percent less than those at primary competitor QVC Inc.

IAC last year hired former Nike Inc. executive Mindy Grossman to revive sales growth at the company's retailing division. Chief Financial Officer Tom McInerney said March 12 that the replacement of HSN's management team was ``about done.''

Analysts' Estimates

IAC earned 33 cents a share, excluding certain expenses including compensation. On that basis, analysts surveyed by Bloomberg estimated average profit of 32 cents a share on revenue of $1.57 billion.

Sales at Ticketmaster, which IAC bought in 2003 for $937.5 million, jumped 26 percent to $309.9 million and accounted for 19 percent of IAC's revenue, up from 17 percent a year earlier. Overseas sales climbed 44 percent, helped by gains from companies that Ticketmaster bought last year in Spain and Turkey.

The company's Ask.com Internet search engine, which competes against Yahoo! Inc. and Google Inc., generated more revenue per query as it directed consumers to IAC's other sites including dating site Match.com.

The media and advertising division, which includes Ask.com, posted operating profit of $10.5 million, compared with a $6.4 million loss a year earlier.

Sales Growth

Diller is trying to accelerate sales growth by using Ask.com to direct Internet users to other units. He said in February that he hoped the site would garner more than 10 percent of U.S. searches.

Operating profit rose 70 percent to $29.2 million at IAC's membership and subscriptions division as more people signed up Match.com and Interval International vacation timeshare service.

Diller, 65, has built the company through acquisitions over the past decade, starting with his purchase of what was then Home Shopping Network for about $1.2 billion in stock in 1996.

Previously, he served as chief executive officer of the Paramount film studio from 1974 to 1984.

To contact the reporter on this story: Danny King in Los Angeles at dking19@bloomberg.net

Last Updated: May 3, 2007 16:29 EDT