Shares of Shutterstock Inc. (NYSE: SSTK) were tumbling today after the digital image library posted disappointing second-quarter results.
The stock closed down 15.4%.
The online image specialist said revenue increased 8% to $134 million, which was short of the analyst consensus of $137.9 million. On the bottom line, adjusted earnings per share fell from $0.36 a year ago to just $0.24, which was well short of expectations of $0.37.
Profits were hurt by heavy investments in new technologies, new talent, and other reorganizations; CEO Jon Oringer said that the moves would "allow the company to deliver profitable growth over time and bolster emerging businesses like Motion, Editorial, Webdam, and Custom Content."
In spite of those investments, management still lowered revenue guidance for the year, projecting $535 million to $545 million, down from a previous range of $545 million to $560 million. The midpoint of the new range represents just 9% revenue growth. The company blamed the mix shift in its e-commerce business for its slower revenue growth.
It also sees operating income falling about 30% in the year to between $30 million and $40 million. While Shutterstock's investments and recent acquisition of Flashstock could ultimately yield success, this is far from the first time the company has disappointed investors -- this is the third time out of the last four reports that the stock has plummeted. Given that record, I wouldn't expect a recovery anytime soon.
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