Yelp stock sinks 8% after earnings decline even more than expected
Yelp Inc. YELP, +3.22% shares dropped more than 8% in after-hours trading Thursday after the online-reviews company reported that holiday-season earnings declined even more than expected. Yelp reported fourth-quarter net income of $17.2 million, or 24 cents a share, down from 37 cents a share a year ago and behind analysts’ average expectations of 26 cents a share, according to FactSet. Yelp reported revenue of $268.8 million, up from $243.7 million a year ago but also behind analysts’ expectations, which called for sales of $273.2 million, according to FactSet. Yelp said that typical seasonality that pushes ad spending into the fourth quarter has changed with Yelp’s new approach to selling non-term advertising, reporting that the company "saw more Local advertisers opt to reduce spending during the December holidays and subsequently resume their spending in the new year." Yelp’s first-quarter revenue guidance also failed to live up to expectations despite the claim that spending had been pushed to the new year, however: Yelp projected revenue growth of 8% to 10% year-over-year, which would top out at less than $260 million, while analysts on average were expecting first-quarter revenue of $268 million. Yelp also announced a new chief financial officer, David Schwarzbach, who previously served that function for Optimizely. Yelp’s previous CFO left for Eventbrite Inc.EB, -1.70% last August, and the position had been filled on an interim basis since. Yelp stock closed with a 3.2% gain at $36.50 Thursday, then fell to less than $34 in late trading following release of the results.
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