Bankrate's Guidance Is Cautious, and So Is Market

Bankrate (RATE) shares are sharply lower this morning, apparently due to some cautious comments on the outlook for Q2 on the company’s post-earnings conference call late yesterday.

On the call, CFO Edward DiMaria cautioned the Street analysts against using the company’s better-than-expected Q1 results as a reason to raise estimates for Q2. (And in fact, the company did not change its full year 2008 guidance.) “We have routinely seen estimates get way out ahead of us, even though we advise against it,” he said. “Now everything is on track and we continue to do very well but a tough economic environment persists and visibility into the business is relatively short, so we want to remain cautious.”

DiMaria noted that the company did better than expected in January, a factor not likely to repeated in Q2.

So without getting into specific guidance for any quarter, which we won’t do, we think that Q2 will look a lot like Q1 minus this January benefit,” he said.

Also, we are going to be making some investments during Q2 for integration…and using some inventory for testing and development work. This will help us begin to realize the value of the new products, which we’re really excited about. So we think that the rest of the year will track more consistently with our plan. With the back half of the year stronger than the front half and perhaps Q2 the lowest from a revenue and EBITDA standpoint. We got ahead of plan in Q1 but again, we think at this point that the rest of the year will look more like our plan.

And then he reinforced his message:

Once again, we ask that you don’t get way out ahead of us and let a little more of the year unfold. We are confident that we will hit our guidance but just give us a chance to build into the optimization plan that we’ve set out.

Message received, loud and clear: RATE this morning is down $5.06, or 9.5%, to $48.