Shares of Yelp Inc. (NYSE:YELP) plunged more than 17 percent Thursday to $42.69 in premarket trading after the consumer review website’s quarterly earnings missed Wall Street forecasts. The San Francisco company’s revenue forecasts for the current quarter also missed estimates, disappointing investors.
For the first quarter ended March 31, Yelp reported a loss of $1.28 million, or earnings per share loss of 2 cents, on revenue of $118.51 million, compared with a loss of $2.6 million, or earnings per share loss of 4 cents, on sales of $76.41 million a year ago.
Wall Street had expected Yelp to report a first-quarter loss of 1 cent per share, on revenue of $120 million, analysts polled by Thomson Reuters said.
Meanwhile, Yelp’s expectations for the current quarter also came up short of expectations as the company expects to generate revenue in the range of $131 million to $134 million, below Wall Street estimates for $138.4 million.
Yelp announced plans in February to buy Eat24, an online and app-based food ordering service, for $134 million after the company’s earnings forecast for this year missed Wall Street expectations due to slowing subscriber growth. The San Bruno, California, company contributed sales of nearly $5 million in the quarter, Yelp said in its earnings report.
Yelp’s average monthly mobile unique visitors grew 29 percent to 79 million from a year ago, while average monthly desktop unique visitors declined 3 percent to 80 million.
"In the first quarter, we acquired Eat24 to drive daily usage and improved utility of Yelp and added partners in five additional verticals of Yelp Platform," Yelp CEO Jeremy Stoppelman said in a statement Wednesday. “Looking to the rest of the year, we will continue to seek ways to increase engagement and drive awareness, while striving to demonstrate the value we can deliver to local businesses in order to capture the large local advertising market opportunity."
For 2015, Yelp maintained its revenue outlook of $574 million to $579 million, which would be sales growth of 53 percent compared to a year earlier, compared to analysts' estimates of $579.21 million.
Shares of Yelp have lost 7 percent this year, and nearly 8 percent in the last 12 months.