LendingTree shares drop the most in 2 years after profit misses expectations

  • Lending Tree reported fourth-quarter earnings per share of 84 cents on revenue of $161 million.
  • Analysts polled by Reuters were expecting EPS of 90 cents on revenue of $150.2 million.
  • The company also reiterated its 2018 forecast, which may have disappointed some investors.
Doug Lebda, chief executive officer of LendingTree Inc.
Chris Goodney | Bloomberg | Getty Images
Doug Lebda, chief executive officer of LendingTree Inc.

Shares of LendingTree plunged close to 8 percent after the online lending exchange reported quarterly earnings that came in 6 cents shy of Wall Street expectations.

Lending Tree reported fourth-quarter adjusted earnings per share of 84 cents on revenue of $161 million. Analysts polled by Reuters were expecting EPS of 90 cents on revenue of $150.2 million.

The company also reiterated its 2018 forecast, which may have disappointed some investors expecting a brighter outlook similar to other lenders, who are benefiting from rising interest rates and the tax cut.

"Maybe there is some sense that they didn't raise guidance, which might be a little disappointing for people who thought they might," said Kerry Rice, senior analyst at Needham. "They've had a great run."

The company also saw a significant uptick in expenses year over year, from marketing spending and tax reform. LendingTree reported a one-time, $9.1 million charge for tax-related expenses, and an additional $10 million charge for the establishment of a charitable foundation.

It was the worst one-day decline for the stock since August 2015.

"They are a generally conservative company so there is probably an upside to those numbers (guidance)," said Rice. "I look at the weakness as a buying opportunity."