Real estate brokerage company ZipRealty Inc. today announced a net loss of $20.2 million in fourth-quarter 2006, or 96 cents per share, compared with net income of $17.9 million, or 73 cents per diluted share, in fourth-quarter 2005.
For the year ended Dec. 31, 2006, ZipRealty reported a net loss of $20.6 million, compared with net income of $20.5 million for the full year in 2005.
“We are pleased with our fourth-quarter results, which exceeded expectations in terms of revenue and profitability,” ZipRealty CEO Richard Sommer said in a statement.
“The period was characterized by better-than-expected performance in new markets as well as market-share gains in a number of our districts.
“Despite the macro-environment, which remains somewhat uncertain, we are committed to executing on our previously announced plan … we are confident that our accelerated market expansion is a strategic and prudent use of our capital and believe the investment will position the company for sustainable earnings growth in the future.”
Excluding the impact of income tax valuation allowance adjustments and share-based compensation, the company’s pro forma loss per basic and diluted share was 7 cents in the fourth quarter compared with income of 4 cents per diluted share in fourth-quarter 2005, ZipRealty reported.
Net revenues were $23.1 million in the fourth quarter, up 6.9 percent from $21.6 million in fourth-quarter 2005. And net revenues increased 2.1 percent in 2006 to $95.4 million compared with $93.4 million in 2005.
The company last month announced a plan to add 700 real estate agents in 2007 and expand into as many as 12 new markets, though the company reported that it expects to post after-tax losses of $6 million to $9 million to pay for this growth.
ZipRealty employed 1,794 agents as of Dec. 31, 2006, up from 1,747 agents at the close of third-quarter 2006 and 1,366 at the end of fourth-quarter 2005.
The company reported that it closed about $1 billion worth of real estate transactions in fourth-quarter 2006, roughly even with the fourth-quarter-2005 level. ZipRealty agents closed 3,026 transactions in the fourth quarter, an increase of 4 percent compared to fourth-quarter 2005.
The average net revenue per transaction increased 1 percent in the fourth quarter to $7,401 compared to third-quarter 2006 and was up 2.7 percent compared to fourth-quarter 2005, the company reported.
For the full year in 2006, the total value of real estate transactions closed dropped 1.5 percent to $4.38 billion compared with $4.45 billion in 2005, while the number of transactions closed increased 3 percent to 12,683. Average net revenue per transaction was $7,306 for the full year in 2006, which is a 1.2 percent drop compared with $7,395 per transaction in 2005.
In guidance for the current year, ZipRealty expects revenues to range from $105 million to $110 million, with average agent productivity of 0.6 to 0.7 closed transactions per agent per month and average net revenue per transaction of $6,000 to $6,500. The company expects to have 2,200 to 2,500 agents by year-end.
ZipRealty also expects a net loss of $10 million to $13 million this year, or 45 cents to 60 cents per basic and diluted share, with a pro forma loss of $6 million to $9 million, or 25 cents to 40 cents per basic and diluted share.
A replay of the ZipRealty fourth-quarter-earnings conference call is available through March 21 by calling (888) 203-1112, password 6184043.
Founded in 1999, ZipRealty operates in 24 metropolitan areas in 15 states and Washington, D.C.
