Shutterfly 3Q net loss widens with higher expenses

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REDWOOD CITY, Calif. (AP) — Shutterfly Inc. reported Wednesday that its third-quarter net loss widened, despite strong revenue growth, as the printer of digital photos and creator of personalized products such as greeting cards and stationary invested heavily in its business.

The company’s results were ahead of analyst expectations, but its forecast for the fourth quarter didn’t impress and Shutterfly’s shares sank 14 percent in after-hours trading.

Shutterfly recorded a net loss of $10 million, or 29 cents per share, for the quarter that ended Sept. 30. This compares to a loss of $4.8 million, or 17 cents per share, in the year-ago quarter.

Revenue rose 56 percent to $76.5 million, with revenue from personalized products and services climbing 73 percent to $56.5 million and prints revenue rising 3 percent to $16.1 million.

Analysts polled by FactSet were expecting a loss of 37 cents per share on $75.6 million in revenue.

Shutterfly said operating expenses rose 80 percent to $57.6 million, as it logged big increases in technology and development, sales and marketing and general and administrative expenses. The company’s CEO, Jeffrey Housenbold, said in a statement that Shutterfly’s investments in its products and services, infrastructure and employees put it in a strong position for the upcoming holiday shopping season.

For the current quarter, Shutterfly expects net income of 98 cents to $1.03 per share on $271 million to $276 million in revenue.

Analysts had been expecting net income of $1.05 per share on $273 million in revenue.

Shutterfly shares fell $6.63 to $40 in after-hours trading. The stock had finished regular trading down 97 cents, or 2 percent, at $46.63.