Shutterfly Shares Plunge 8% On Weak Outlook, But Results Top View

(RTTNews) - Shares of Shutterfly, Inc. (SFLY) plunged eight percent in extended trading on Wednesday after the photo sharing website provided weak outlook for the first quarter and full-year 2014. The company also reported a profit for the fourth quarter that decreased 18 percent from last year, reflecting lower margins and higher provision for income taxes.

However, both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings and revenue forecast for the first quarter and full-year 2014.

"Q4 was a strong finish to another outstanding year at Shutterfly resulting in record revenue, adjusted EBITDA and free cash flow," President and CEO Jeffrey Housenbold said in a statement.

The Redwood City, California-based Internet-based social expression and personal publishing service provider posted a net income of $43.65 million or $1.10 per share for the fourth quarter, lower than $53.03 million or $1.40 per share in the prior-ear quarter.

Excluding items, adjusted earnings for the latest quarter was $47.47 million or $1.20 per share. On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter increased 17 percent to $410.79 million from $351.78 million in the same quarter of last year, and topped fourteen Wall Street analysts' consensus estimate of $406.26 million.

Consumer net revenues net revenues grew 16 percent year-over-year to $398.6 million, and net revenues from enterprise surged 48 percent to $12.2 million from last year.

Transacting customers totaled 4.7 million, a 10 percent year-over-year increase, orders grew 12 percent to 7.7 million from last year, with average order value increasing 4 percent to $51.80 from a year ago.

Gross profit margin for the quarter contracted 60 basis points to 59.9 percent from last year's 60.5 percent.

Provision for income taxes totaled $57.29 million, compared to $48.17 million in the year-ago quarter.

For fiscal 2013, the company reported net income of $9.29 million or $0.24 per share, higher than $23.0 million or $0.61 per share in the prior year. Excluding items, adjusted earnings for the latest period was $15.16 million or $0.38 per share. Analysts expected the company to report earnings of $0.21 per share for fiscal 2013.

Net revenues for the full year increased 22 percent to $783.64 million from $640.62 million in the previous year. Street was looking for full-year 2013 revenues of $779.89 million.

Looking ahead to the first quarter of fiscal 2014, the company expects adjusted loss in a range of $0.86 to $0.92 per share, on projected net revenues between $132.0 million and $135.0 million. Analysts currently expect the company to report a loss of $0.42 per share for the first quarter, on quarterly revenues of $138.35 million.

For fiscal 2014, the company anticipates adjusted loss in a range of $0.02 to $0.28 per share, on anticipated annual net revenues between $900.0 million and $920.0 million. Street is currently looking for full-year 2014 earnings of $0.33 per share on revenues of $909.86 million.

"We executed well against our 2013 strategic plan while simultaneously focusing on the long-term through smart investments in consumer facing programs and back-end infrastructure projects that will provide future scale and scope efficiencies," Housenbold added.

SFLY closed Wednesday's regular trading session at $49.67, up $0.07 or 0.14% on a volume of 1.75 million shares. However, the stock plunged $3.97 or 7.99% in the after-hours trading.