Snap stock rose then fell in after-hours trading Tuesday as the company reported second-quarter earnings that beat on both the top and bottom lines but it posted its first-ever quarterly drop in users.
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Snap (SNAP) reported revenue of $262 million. That beat analyst estimates for $251 million and up 44% from the year-ago quarter. The operator of Snapchat, Snap reported an adjusted loss of 14 cents per share, better than the 17-cent loss that analysts expected.
Snap shares initially jumped 11%, near 14.60, in post-bell trades on the stock market today, then fell back to 14.40, down 2.8%.
Daily active users rose 8% from the year-ago period to 188 million. But it was down 2% sequentially, from the 191 million users it had at the end of the second quarter. Wall Street analysts had low expectations on user growth. The average forecast was for no growth.
Snapchat reported average revenue per user of $1.40, up 34% and above analyst estimates of about $1.29.
Facebook Assault
The company has been under constant assault from Facebook (FB), which has copied most of Snapchat's best features. Facebook has applied them in its Instagram photo- and video-sharing platform. Snap has also struggled with the impact of a product redesign in February that was widely criticized.
"We are excited by the progress we have been making and are optimistic about the opportunities ahead as we continue to invest in innovation," Evan Spiegel, Snap chief executive, said in prepared remarks.
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The post Snap Stock Slumps As Quarterly Earnings Reports Shows User Decline appeared first on Investor's Business Daily.
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