Earnings Results: On anniversary of home-flipping flop, Zillow is done selling houses

by | Nov 2, 2022 | Stock Market

Zillow Group Inc. is done selling houses a year after ditching its iBuying business, and executives reported better-than-expected earnings and revenue while wrapping up the effort in the third quarter, though their forecast undershot Wall Street’s expectations. Zillow
reported a third-quarter loss of $53 million, or 21 cents a share, on net revenue of $483 million, down from $1.74 billion a year ago. After adjusting for stock compensation, losses from discontinued operations and other effects, Zillow reported earnings of 38 cents a share, improving from an adjusted loss of 95 cents a share a year ago.

Analysts on average expected adjusted earnings of 14 cents a share on sales of $458 million. Zillow stock increased more than 4% in after-hours trading following the release of the results, after closing with a 4.9% decline at $29.43. Zillow’s sales declined from last year because of what happened on this date in 2021: The end of the company’s experiment with participating in the industry it services. On Nov. 2, 2021, Zillow announced that it was ditching its home-flipping business and selling a large portfolio of homes that it had purchased for too much amid changes in the housing market, while laying off a quarter of staff. Those changes have continued in the past year, as Zillow has unloaded all of the homes. Executives said Wednesday that the sales were complete as of the end of the third quarter, on Sept. 30, and the division had been completely shut down. The housing market continues to be unstable, however, making the path forward unclear. Zillow executives Wednesday guided for fourth-quarter revenue of $396 million to $425 million, as well as adjusted Ebitda of $48 million to $63 million. Analysts on average were expecting adjusted Ebitda of $89 million on sales of $434 million for the final three months of the year, according to FactSet. Management …

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