Barrington Downgrades Blucora Amid Earnings Miss

Blucora Inc's (NASDAQ: BCOR) 30 percent third-quarter revenue decline for its largest business segment creates a cloudy outlook and few catalysts, an analyst said Thursday.

Barrington's Alexander Paris downgraded the shares to Market Perform from Outperform Thursday after the company missed revenue expectations and offered a fourth-quarter outlook lower than consensus views.

The Bellevue, Washington-based Internet company, whose stock price hit a high of $1,305 per share in the dot-com bubble of 2000, traded recently down 12 percent at $14.84 a share. Adjusted earnings equaled $0.15 per share,

Formerly known as InfoSpace, Blucora is, if nothing else, a survivor. Since a 1996 launch, it's gone through long list of business models.

Currently, "our multi-year transformation continues to progress," according to its Chief Executive William J. Ruckelshaus, whose father William D., served as President Richard M. Nixon's Deputy Attorney General and Director of the Environmental Protection Agency.

Blucora's third-quarter net loss narrowed to $0.05 per share, from $0.16 per share a year, earlier, while total revenue fell 7 percent to $114.9 million.

Its Internet search business took in $74.4 million, down from$107.7 million last year.

The company wants to get more into e-commerce, a segment that generated $38 million in third-quarter revenue for Bluecora, up from $14.6 million a year earlier.

It's also touting an online tax preparation service, which posted third-quarter revenue of $2.5 million, up 41 percent.

The 49-year-old Ruckelshaus said Blucora's revenue decline "underscores the importance of our diversification strategy."

Paris said Blucora's stock probably has limited downside. "But we can't make a case for committing new money to the shares."

Cutting his 2015 earnings forecast more than 16 percent to $2.15 per share, "we wouldn't necessarily be sellers if we owned the shares," Paris said, adding that shares will probably "trade sideways at best" in the near term.