What: Shares of Bankrate (RATE) were down 17.8% as of 11:30 a.m. Thursday after the financial services website reported decent fiscal-first-quarter results, but followed with disappointing guidance for the full year. Bankrate also reduced adjusted earnings results for several prior years following an internal company review.
So what: First-quarter revenue climbed 4% year over year to $141.5 million, which translated to adjusted earnings before interest, taxes, depreciation and amortization of $40.4 million. Adjusted net income came in at $20.2 million, or $0.19 per diluted share, up slightly from $0.18 per share in the year-ago period. Analysts, on average, were anticipating adjusted earnings of $0.19 per share, but on lower revenue of $138 million.
For the full year 2015, Bankrate now expects revenue of $520 million to $530 million, and adjusted EBTIDA between $145 million and $150 million. Wall Street's models called for revenue and earnings of $612.4 million and $0.81 per share, respectively.
Finally, in a separate release, Bankrate announced the results of a previously disclosed internal review of its years 2011, 2012, and 2013. Specifically, its audit committee concluded accounting for "certain historical business activities had been recorded in a manner that was not consistent with generally accepted accounting principles in the United States." In aggregate over the restated periods, the misstatements resulted in a reduction to adjusted EBITDA of $5.2 million.
Now what: That's a relatively small amount considering Bankrate's total adjusted EBITDA over the same period came in at $448.4 million. But even though the market is a forward-looking machine, this certainly doesn't help calm the nerves of investors as they process Bankrate's light guidance. As a result, and given the risk of further downside pressure as analysts digest that guidance in the near term, I'm content watching Bankrate from the sidelines until the dust settles.
