For shareholders, it's become customary to expect nice growth from Bankrate (NASDAQ: RATE). But with the volatility in financial markets and problems in the online ad space, things have gotten much tougher.Despite all this, Bankrate was still able to manage through Q1. Revenues came to $38.3 million, down from $42.5 million in the same period a year ago. Net income was $4.7 million, or 25 cents per share. Again, this was down from $6.8 million, or 35 cents per share (in Q1 of 2008).
Bankrate continues to ramp traffic. In fact, the company recently introduced a new website, which is getting traction. For example, page views for Q1 were 199.5 million, which is a sequential increase of 21%. Some of the hot areas include refinancing, insurance and deposits. Basically, consumers are shopping around for better deals.
Keep in mind that a large chunk of the traffic was organic (such as through search engines and links). In other words, it has zero cost -- which helps explain Bankrate's juicy margins.
And there are some signs of a comeback from advertisers. Already, there's been a pick-up in ad campaigns.
Yet, Bankrate said it will not provide guidance. Simply put, the visibility is still opaque. But the fact is that the company has popular offerings and generates strong cash flows. And when things settle down, Bankrate should go back to its growing ways.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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