Lawsuit settlement boosts bottom line at Overstock.com

SALT LAKE CITY — Proceeds from the settlement of a long-running lawsuit boosted first-quarter profits at Overstock.com to $13.4 million or 53 cents per share.

The e-commerce powerhouse said revenues rose 3.9% to $413.7 million, including a $3 increase in the average order size to $177.

In last year’s first quarter, net income totaled $2.74 million or 11 cents per share.

The latest quarter included pre-tax proceeds of $19.5 million as settlement of a 9-year-old lawsuit against Merrill Lynch, in which Overstock had accused the brokerage firm of manipulating its stock price.

In a statement accompanying its latest earnings, Overstock said it expects a slower rate of increase in its average order size in the coming months, and said its overall revenue growth has slowed somewhat since the middle of last year.

The retailer said it believes the slowdown in revenue growth is due to changes that Google made in its natural search engine algorithms.

“While we work to adapt to Google’s changes, we have increased our emphasis on other marketing channels, such as sponsored search, which has generated revenue growth but with higher associated marketing expenses than natural search,” Overstock said in the statement.

The retailer noted that Mitch Edwards, the company’s senior vice president and general counsel, remains acting CEO in the absence of Patrick Byrne, who announced last month he was taking an indefinite medical leave while he undergoes treatment for Hepatitis C.

Edwards joined the company last August.