Pinterest’s stock tumbles on sales, earnings misses

Pinterest’s stock tumbles on sales, earnings misses

Pinterest Inc. reported sales, profits and monthly active users that fell short of financial analysts’ estimates Thursday, initially sending shares down 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in extended trading.

Pinterest
PINS,
+1.49{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
 reported fourth-quarter earnings of $17.5 million, or 3 cents a share, on sales of $877.2 million, up 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from $846.7 million in the year-ago quarter. After adjusting for stock compensation and other factors, the online-scrapbook company reported earnings of 3 cents a share.

Pinterest also announced its board of directors authorized a repurchase of up to $500 million of its Class A common stock over the next 12 months.

“While the industry as a whole is facing headwinds, we are adapting quickly to a changing macro environment and are committed to creating a more positive online experience for our users and advertisers,” new Pinterest Chief Executive Bill Ready said in a statement.

Pinterest said first-quarter revenue will “grow low single digits on a year-over-year percentage basis” and that Chief Financial Officer Todd Morgenfeld will leave the company July 1. 

Analysts on average expected Pinterest to report adjusted earnings of 27 cents a share on sales of $888 million, according to FactSet. Shares drooped 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in after-hours trading Monday before rallying. In the regular session, Pinterest shares inched up 1.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $27.93.

Monthly active users jumped 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 450 million; Wall Street analysts on average predicted 451.7 million.

The financial results mirrored sagging revenue and earnings that plagued Snap Inc.
SNAP,
+9.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996},
Alphabet Inc.’s 
GOOGL,
-1.79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

GOOG,
-1.66{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Google and Facebook parent company Meta Platforms Inc. 
META,
-0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
last week as online ad buyers scale back spending in a slowing economy.

Last week, Pinterest announced a workforce reduction of less than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, or about 150 jobs.

Evercore ISI analyst Mark Mahaney had expected better things financially from Pinterest “given its relatively low impact from [Apple Inc.’s
AAPL,
-1.79{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
App Tracking Transparency] and potential share gains from [Twitter], but the checks also point to a clear sign that the Ad Winter is extending into Q1,” he said in a note Sunday. “We continue to believe that in an Ad Winter, marketing budgets will concentrate to the largest platforms –– META & GOOG.”

Pinterest’s stock has risen 15{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} so far this year, while the S&P 500 index
SPX,
-0.61{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
 has risen 7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in 2023.

Minnie Arwood

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