Earnings Preview: IAC to report 3Q results

OVERVIEW: The former Internet conglomerate finished its split into five publicly traded companies in August, which means that for part of the third quarter IAC operated and traded on its own as an Internet services company.

On August 21, home shopping network HSN Inc., time-share business Interval Leisure Group Inc., ticketing service Ticketmaster, lending, real estate business Tree.com Inc. and IAC began trading as separate entities. IAC retained Internet properties like search engine Ask.com and invitation site Evite.

The split apparently happened in the nick of time, IAC's billionaire head Barry Diller told the Associated Press near the end of the quarter. IAC had borrowed $2 billion to finance three of the five companies.

"Some of our advisers said to us, 'Wait a few weeks,' and we said, 'We're not waiting an hour,'" he said. "And that was wise, because if we had tried to finance the spin transactions now we'd be frozen. We'd have no chance of doing it. Or it would cost us so much money that you wouldn't justify it."

BY THE NUMBERS: Analysts polled by Thomson Reuters expect third-quarter adjusted earnings of 16 cents per share on revenue of $355.4 billion. Analyst estimates generally exclude special items.

ANALYST TAKE: In a late October client note, Piper Jaffray analyst Gene Munster said he believed investors have had a hard time determining how healthy IAC is on its own, so they have been watching and waiting since the spinoffs occurred.

"The September quarter report should give investors more confidence in the new IAC as a stand-alone media play, which we believe provides long term upside," said Munster.

Munster also said that advertising companies that have significant exposure to the search market--as IAC does with Ask.com--will be in the best position as advertising spending slows down.

WHAT'S AHEAD: Ask.com unveiled a revamped version of its Web site in early October. Citi analyst Mark Mahaney said IAC is pushing out redesigned Evite and CitySearch sites, too.