The photo-sharing site was tumbling after management projected a March-ending quarterly loss of between 86 cents to 92 cents a share, more than double what analysts were expecting. Consensus was for a loss of 42 cents a share.
Management intends to invest heavily over 2014 in additional infrastructure as it seeks to expand its most profitable segment, producing physical albums and greeting cards from users' online photos. Operating expenses are set to increase on the additional investments and consolidates its four Arizona-based factories into one.
CEO Jeffrey Housenbold said in a statement that last year the company focused "on the long-term through smart investments in consumer facing programs and back-end infrastructure projects that will provide future scale and scope efficiencies", a trend to continue through the current year.
For its fourth quarter, the company posted per-share earnings of $1.20, 12 cents above consensus, and 17% revenue growth to $411 million.
TheStreet Ratings team rates SHUTTERFLY INC as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate SHUTTERFLY INC (SFLY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and reasonable valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."
- You can view the full analysis from the report here: SFLY Ratings Report