Angie’s List shares sink despite record revenue

Indianapolis-based Angie's List Inc. reported record revenue for the second quarter on Wednesday afternoon, but its shares fell  in after-hours trading on word that Internet giant eBay will be testing its own consumer-reviews site in the United Kingdom.

Angie's List said revenue rose to $59.2 million in the quarter ended June 30, a rise of  62 percent over the second quarter of 2012.

The company continued to lose money, but the losses are getting smaller. The company lost $14.3 million, or 25 cents per share, in the latest period compared to a loss of $23.4 million, or 41 cents per share, for the same quarter a year ago.

The loss of 25 cents a share was in line with a consensus of 12 analysts who follow the publisher of consumer reviews for services such as plumbers and roofers.

Angie's List shares closed Wednesday before the company reported earnings at $26.50, down 1.3 percent. They continued to fall another 5.7 percent afterhours, to $25 per share.

Earlier Wednesday, TechCrunch.com reported that Internet giant eBay was testing a consumer ratings and reviews service "similar to Angie's List" in the UK known as eBayHire. EBay has not announced a similar pilot in the United States, at least "not yet," said the industry trade site.

Despite spending millions of dollars on national marketing, Angie's List has been facing growing competition in its niche by firms such as Yelp. The company has been perennially unprofitable since its founding in the 1990s because much of its cash flow has gone to establishing a presence in new cities.

As those markets mature, the company's marketing expenses tend to fall. Nationwide, Angie's List marketing expenses grew just 1 percent in the second quarter, to $28 million.
 
The company reported new highs for paid membership, with nearly 2.2 million at the end of the quarter, an increase of 51 percent from a year ago. Participating service providers rose 42 percent, to 42,452.