IAC 1Q Down But TM Up - Pollstar News

IAC’s first quarter financial report may have detailed a 13 percent drop in profits, but every cloud has a silver lining in the world of company chairman Barry Diller.

"With this quarter’s results, it couldn’t be clearer that we are on the right course in separating IAC into five distinct public entities," Diller said during a recent earnings call. "Each of the businesses have their own unique opportunities – some with current challenges and others with wind at their backs."

Following a court order last month and rumors of renewed discussions between Diller and IAC majority shareholder Liberty Media, it appears that Diller’s proposal to spin off the company’s Ticketmaster, HSN, Interval time-share business and LendingTree mortgage referral units will proceed as planned.

When Diller proposed the initiation of a new voting structure for the spun-off units that would apparently dilute Liberty’s voting power, Liberty executives balked. However, Diller silenced any rumors that the two companies planned to cut ties with a stock swap, calling such a deal "very unlikely" during the call.

Diller told analysts that the IAC board will likely hold one or two more discussions before spin-off plans are finalized and filed with regulators sometime this month. The spin-offs are expected to be completed in August.

IAC net income for the first quarter dropped 18 cents per share to $52.8 million from $60.7 million, or 20 cents per share, during 1Q of 2007.

Earnings dropped 10 percent from $96.9 million during the prior year, to $87.2 million.

In the breakdown of various IAC units, the Ticketmaster division fared well with domestic revenues up 15 percent to $349 million. Contributions from the recent Paciolan and TicketsNow acquisitions, higher average revenues per ticket and higher ticket volumes contributed to TM’s growth, the company said. Operating income fell 21 percent to $51 million following acquisitions and strategic investments in Germany, China and resale initiatives.

IAC stock rose 35 cents to close at $20.81 following the report.