Snap Shares Take a Dive as Company Reports Earnings

Shares of the parent company of SnapChat, Snap Inc., were headed lower on Tuesday after the company reported third quarter financial results.

The company, which has seen its shares rise over 150% this year, reported after the closing bell, revealing a loss of 4 cents a share while analysts expected a loss of 5 cents. Revenue at $446 million was also better than the $435.1 million expected, according to a forecast by Refinitiv.

Snap also reported that global daily active users (DAUs) were 210 million compared to the 207 million forecast by FactSet. The average revenue per user was $2.12 vs. $2.10 forecast by FactSet.

Shares were falling on the company’s dismal outlook for the fourth quarter. Looking ahead, Snap said it expects fourth quarter revenue to be $540 million to $560 million. This is compared to the $555.4 million expected according to Refinitiv.

According to Chief Financial Officer Derek Andersen, Snap gave a light forecast for the fourth quarter, because 2019 will include one less week between Black Friday and the end of the holiday shopping season.

“The way the calendar falls this year there’s one fewer week of activity between those two holidays,” Andersen said to analysts. “That’s a potential headwind for us, and the guide reflects that.”

“We are a high growth business, with strong operating leverage, a clear path to profitability, a distinct vision for the future, and the ability to invest over the long term,” Snap CEO Evan Spiegel said in a statement. “We are excited about executing on the many opportunities in front of us.”

This was the third quarter in a row of growth for the company in its user base.

Disclaimer: We have no position in Snap Inc. (NYSE: SNAP) and have not been compensated for this article.