Angie's List forecasts revenue below Street

Reuters News
Posted: Jul 23, 2014 4:40 PM

(Reuters) - Angie's List Inc, which operates a website that allows users to review local businesses, forecast quarterly revenue below estimates and reported a bigger-than-expected quarterly loss as it spent more to sign up customers.

The company's shares fell 14 percent after markets closed.

Angie's List said it expects revenue of $80.5 million-$82.5 million for the third quarter ending September.

Analysts on average were expecting $86.63 million, according to Thomson Reuters I/B/E/S.

The company also forecast marketing expenses of $20 million-$23 million.

Marketing expenses jumped 28 percent to $35.9 million in the second quarter ended June 30, while revenue increased 33 percent to $78.9 million.

Total paid memberships rose 31 percent to 2.84 million.

"We increased marketing spend during a seasonally strong period and had a record quarter in gross new member additions," Chief Executive Bill Oesterle said in a statement on Wednesday.

Net loss widened to $18.4 million, or 31 cents per share, from $14.3 million, or 25 cents per share, a year earlier.

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Analysts had expected a loss of 24 cents per share on revenue of $80.2 million.

Oesterle said he expects significant improvement in margins in the second half.

The stock closed at $10.17 on the Nasdaq on Wednesday. Shares have lost about a third of their value so far this year.

(Reporting by Soham Chatterjee in Bangalore; Editing by Robin Paxton and Joyjeet Das)