58.com Sinks 7% On Disappointing Outlook
58.com (NYSE: WUBA) fell more than seven percent Thursday morning after China's answer to Craigslist said third-quarter will be well below the Wall Street consensus.
The company's shares had rallied sharply in recent days on the expectations it would post results higher than analysts' estimates. Second-quarter revenue was indeed slightly higher than expected, while earnings were well ahead of Street views.
But its third-quarter revenue forecast is nearly eight percent below analysts' expectation.
Chief Executive Michael Yao said the company must "invest aggressively now" to insure its competitive advantage and future growth.
The company forecast third-quarter revenue of between $66 million and $68 million, for a growth rate of roughly 60 percent. Wall Street expected third-quarter revenue of $72.6 million.
Adjusted second quarter earnings rose to $0.15 per share, from $0.06 a year earlier, while revenue grew $64.6 million from $35.1 million last year. Analysts expected adjusted earnings of $0.08 per share on revenue of $62.7 million.
58.com shares traded recently at $47.07, down 6.96 percent.
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