SOURCE: Reuters

(Vienna, Austria) — Austrian Internet bookmaker bwin Interactive Entertainment reported a third-quarter core profit and a return to customer growth on Thursday but investors honed in on a net loss and fled the stock in droves.

Bwin shares plunged as much as 15 percent, on course for their biggest one-day loss in more than a year, and erased the gains of a two-week rally, trading as low as 22.12 euros and making it one of the top losers on Austria's ATX index.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at 15.2 million euros ($22.3 million) in the quarter after stripping off 6 million euros in share-based staff compensation. They had a 5.2 million euro loss a year ago.

But bwin was stuck with a net loss of 5.1 million euros in the quarter, narrower than in the previous year's quarter but leaving it with a loss after nine months which will make it difficult to reach market expectations for the full year.

"If you look at the analyst expectations for the full year, they are going to have a hard time reaching them with this result," said Sal. Oppenheim analyst Christine Reitsamer.

According to Reuters Estimates, the average estimate for bwin's full-year net profit is 14.9 million euros. Bwin would have to post net profit of 15.7 million euros in the fourth quarter to reach this.

Gross gaming revenues were up 20 percent at 86.2 million euros after discontinued operations in the United States and Turkey were stripped off. Sports betting revenues rose 15 percent and brought in a betting margin of 8.5 percent.

After two quarters of declining customer numbers due to a cut in marketing spending, bwin said its customer base expanded by 9 percent during the third quarter, and it won 11 percent more new customers than it did in the previous quarter.

However, that rise in revenues was paid for with an increase in marketing spending, which ticked up 14 percent from the previous quarter.

"It's certainly good if they are growing again, but if their EBIT and net profit stay negative, that doesn't help," Reitsamer said.

Bwin shares had risen by 60 percent this year before Thursday's drop. In November alone, they had gained as much as 21 percent on the back of favourable court decisions in Germany.