Shutterfly Shares Tumble On Weak Outlook, But Q3 Loss Narrows

(RTTNews) - Shares of photo-sharing website Shutterfly, Inc. (SFLY) tumbled more than 10 percent in extended trades Tuesday after the company provided financial outlook for the fourth quarter below analysts' estimates and also lowered its revenue guidance for fiscal 2013.

However, the company reported a loss for the third quarter that narrowed from last year on a 25 percent increase in revenue. Loss per share came in narrower than analysts' expectations, while quarterly revenues topped their estimates.

The Redwood City, California-based company's third-quarter net loss was $10.15 million or $0.27 per share, narrower than net loss of $10.48 million or $0.29 per share in the prior-year quarter.

Excluding items, adjusted loss for the quarter was $0.24 per share, compared to loss of $0.29 per share in the same period last year. On average, eleven analysts polled by Thomson Reuters expected the company to report loss of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter increased 25 percent to $122.69 million from $98.54 million in the previous-year quarter, and topped analysts' consensus estimate of $118.37 million.

Consumer net revenues net revenues grew 25 percent year-over-year to $112.7 million, while enterprise net revenues increased 22 percent to $10.0 million from last year.

Transacting customers for the quarter totaled 2.38 million, a 6 percent year-over-year increase. Orders grew 8 percent to 3.88 million from last year, with average order value increasing 16 percent to $29.07 from a year ago.

However, gross profit margin for the quarter declined to 42 percent from last year's 44 percent. Total operating expenses grew 28 percent to $86.00 million from $67.15 million in the year-ago quarter.

Looking ahead to the fourth quarter, Shutterfly forecast net income in a range of $0.92 to $1.08 per share, adjusted net income of $0.95 to $1.11 per share, and net revenues of $392.1 million to $405.1 million. Analysts expect earnings of $1.45 per share for the quarter on revenues of $414.72 million.

For fiscal 2013, Shutterfly now forecasts earnings of $0.06 to $0.22 per share, adjusted earnings of $0.20 to $0.35 per share, and revenues of $765 million to $778 million. The company earlier forecast net earnings of $0.08 to $0.19 per share, adjusted earnings of $0.23 to $0.33 per share, and revenues of $776 million to $781 million.

Street is currently looking for full-year earnings of $0.28 per share for the year on revenues of $784 million.

SFLY closed Tuesday's regular trading session at $52.26, down $1.79 or 3.31 percent on a volume of 1.74 million shares. In after-hours, the stock further declined $5.66 or 10.83 percent to $46.60.