Pinterest stock tumbles on sales, earnings are missing

Pinterest Inc. reported sales, profits and monthly active users Thursday lower than analysts’ estimates, initially sending the stock down 14% in extended trading.

Pinterest pins,
reported fourth quarter earnings of $17.5 million, or 3 cents a share, on sales of $877.2 million, up 4% from $846.7 million in the year-ago quarter. After adjusting for stock compensation and other factors, the online album company posted earnings of 3 cents a share.

Pinterest also announced that its board of directors has authorized a buyback 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 rapidly adapting to an ever-changing macro environment and are committed to creating a more positive online experience for our users and advertisers,” the new director said in a statement. Pinterest Delegate Bill Ready.

Pinterest said first-quarter revenue “will increase in the low single digits on a year-over-year percentage basis” and that Chief Financial Officer Todd Morgenfeld will leave the company on 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 fell 14% in after-hours trading on Monday before the rally. In the regular session, Pinterest shares rose 1.6% to $27.93.

Monthly active users increased by 4% to 450 million; Wall Street analysts have forecast an average of 451.7 million.

Financial results reflected declines in revenue and earnings plaguing Snap Inc. SNAP,
GOOGL by Alphabet Inc.,

Parent company of Google and Facebook Meta Platforms Inc. META,
last week as online ad shoppers cut back on spending in a slowing economy.

Last week, Pinterest announced a workforce reduction of less than 5%, or about 150 jobs.

Evercore ISI analyst Mark Mahaney expected better things financially from Pinterest “given its relatively low impact from [Apple Inc.’s
App Tracking Transparency] and potential equity gains from [Twitter]but the checks also point to a clear signal that the Ad Winter is extending into the first quarter,” he said in a note Sunday. “We continue to believe that in an ad winter, marketing budgets will focus on the largest platforms: META and GOOG”.

Pinterest shares are up 15% so far this year, while the S&P 500 SPX index,
increased by 7% in 2023.

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