By Jeremy C. Owens
Pinterest thrashes earnings estimates while adding another 26 million active users, shares head for big gains after earnings for a second consecutive quarter
Pinterest Inc. continued to experience a surge in new users during the COVID-19 pandemic to bigger profit and revenue growth than expected this summer, according to a Wednesday earnings report that sent shares on another ride toward fresh record highs.
Pinterest (PINS) reported a third-quarter loss of $94.2 million, or 16 cents a share, on revenue of $442.6 million, up from $280 million a year ago. After adjusting for stock-based compensation and other factors, the company reported earnings of 13 cents a share, up from adjusted earnings of a penny a share a year ago. Analysts on average expected adjusted earnings of 4 cents a share on sales of $383 million.
Pinterest shares jumped more than 20% in after-hours trading following the report, after closing with a 7.1% decline at $48.78. Shares were topping $60 in the extended session; Pinterest shares have never traded for higher than $53.87 in regular trading.
Pinterest shares have more than doubled to record highs since the social-media company's last earnings report, which predicted much higher revenue and user growth than previously expected (). The online-advertising market seems to have found strength despite the COVID-19 pandemic, as strong third-quarter financial results last week from Snap Inc. (SNAP)sent stocks in ad-supported companies higher across the board ( ). More earnings are expected Thursday afternoon from online-ad powerhouses Facebook Inc. (FB), Alphabet Inc. (GOOGL)(GOOGL) and Twitter Inc. (TWTR)
Pinterest's big surge on the stock market was also attributed to an unexpected explosion in users on the company's service, which is similar to an online scrapbook. In late July, Pinterest reported that monthly active users had jumped to 416 million, up from 367 million the quarter before. Analysts had expected Pinterest to add about 12 million new users in the quarter.
In Wednesday's report, Pinterest revealed a monthly active user count of 442 million, up 26 million from the previous quarter. Analysts on average expected Pinterest to report more than 436 million users, after the previous quarter's additions led to increased expectations.
Pinterest stock has gained 165% so far this year, and more than 106% in the past three months, as the S&P 500 index has gained 5% and 5.4% in those periods.
-Jeremy C. Owens; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
October 28, 2020 16:23 ET (20:23 GMT)
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