Zillow Inc., the real estate website that’s acquiring smaller rival Trulia Inc. for $3.5 billion, reported second-quarter sales that topped analysts’ estimates as traffic increased and more agents used its home-listing service.
Sales rose 68 percent to a record $78.7 million, from $46.9 million a year earlier, Zillow said yesterday in a statement. That compared with analysts’ average prediction of $76.6 million, according to data compiled by Bloomberg.
The Seattle-based company, the biggest U.S. website for real-estate agents and prospective home buyers, also raised its annual sales forecast as advertising and listing revenue surges. The all-stock deal for Trulia, unveiled last week, is part of Chief Executive Officer Spencer Rascoff’s goal of creating a family of Web brands under the Zillow name that could span sales to rentals to mortgages.
“Agents are increasingly looking to Zillow as a lead-generation tool,” said Ronald Josey, an analyst at JMP Securities, who rates the stock the equivalent of a buy. “As long as these things continue I think that should bode well for the results.”
Zillow shares fell 2.6 percent to $141.06 at yesterday’s close in New York. The stock has gained 73 percent this year.
The company’s second-quarter net loss was $10.5 million, or 26 cents a share, compared with a loss of $10.2 million, or 30 cents, a year earlier. Excluding certain costs, the per-share loss in the recent period was 5 cents, compared with analysts’ average prediction for a loss of 4 cents.
Zillow said revenue from its Premier Agent advertising program rose 82 percent, with bookings in that business more than doubling. Traffic on the Web and mobile devices reached 81.1 million average monthly unique users in the quarter, with a record of almost 89 million in July.
The increase in users “has created extra impressions available to sell,” Rascoff said in an interview. “And advertisers follow the audience.”
Third-quarter sales will rise to $87 million to $88 million, exceeding the average analysts’ estimate for $82.7 million. Revenue for the full year will be $321 million to $323 million, Zillow said yesterday, increasing its forecast from a prior range of $304 million to $308 million.
Last week, San Francisco-based Trulia reported second-quarter revenue of $64.1 million, beating the average analyst estimate of $62.3 million, according to data compiled by Bloomberg.
A combined Zillow and Trulia would be positioned to capture a larger share of digital real estate ads as more people turn to the Web for house-hunting and as property agents deploy more marketing dollars on the Internet. The companies estimate that together they would now have less than 4 percent of the $12 billion a year real estate advertising market in the U.S.
“This quarter was big before the Trulia deal even came together,” Rascoff said. “It’s too early to say the impact the announcement will have on our businesses.”
Trulia will be the largest acquisition for Zillow, according to data compiled by Bloomberg. The deal’s completion is contingent on regulators’ approval and isn’t projected to occur until 2015.