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Will Shutterfly Report Negative Earnings Again?

Karen Rogers

Karen Rogers

1 followers

Shutterfly, Inc. (SFLY) will announce its second quarter 2014 earnings after the bell on Wednesday, July 30, 2014, at 2:00 p.m. PT, 5:00 p.m. ET. The company will broadcast the earnings and quarterly conference live from its website at http://ir.shutterfly.com/eventdetail.cfm?EventID=147064.

Shutterfly is an online web platform designed for uploading and sharing digital photos. Users can create gifts such as mugs, t-shirts and photo books from their uploaded photos. Based in Redwood, California, Shutterfly was founded in December 1999 and went public on September 29, 2006.

Analysts Expect:

  • EPS ranging from -$0.72 to -$0.77 with a target of -$0.74
  • Revenue ranging from $155 million to $158 million with a target of $156.95 million

For Sale

According to financial news agency Bloomberg, Shutterfly put itself up for sale on July 2, 2014. The company contacted investment banking firm Qatalyst Partners to find a buyer for the digital photo site. Some parties interested in acquiring Shutterfly include a private equity firm, e-commerce companies and web storage firms.

Despite offering a wide range of products and services, Shutterfly can’t generate a consistently positive EPS. The company posted a negative EPS three out of the past four consecutive quarters, and analysts expect the Q2 2014 EPS to come in negative as well.

EPS

Q1 2014

Q4 2013

Q3 2013

Q2 2013

Estimate

-$0.93

$1.09

-$0.62

-$0.54

Actual

-$0.82

$1.20

-$0.24

-$0.29

Difference

-$0.11

+$0.11

-$0.38

-$0.27

Competitors

Shutterfly has three main rivals who provide virtually the same type of digital photo services: Hewlett-Packard Co. (HPQ), Wal-Mart Stores, Inc. (WMT), and Vista Print NV (VPRT). Hewlett-Packard offers free software that lets its customers upload digital photos and create photobooks, calendars and other keepsakes. Wal-Mart has a website that lets customers upload their digital photos and create photo memorabilia and gifts online. Customer can choose to receive their finished products in the mail or pick them up at the nearest Wal-Mart store. Vista Print NV (VPRT) markets its digital photo services to businesses, groups and individual customers. Vista Print also provides online digital marketing designed to help businesses increase their customer base. In addition, other large companies encroaching on Shutterfly’s market share include Costo Wholesale Corporation (COST), CVS Caremark Corporation (CVS) and Walgreen Co. (WAG).

 

SFLY

HPQ

WMT

VPRT

Share Price

$47.16

$35.60

$75.71

$37.84

Market Cap

$1.8B

$66.3B

$244.9B

$1.3B

Revenue (TTM)

$804.0M

$111.8B

$477.2B

$1.2B

Net Income (TTM)

$9.285M

$5.113B

$16.022B

$29.44M

P/E (TTM)

----

12.5

15.7

28.9

EPS (TTM)

-$0.37

$2.84

$4.82

$1.31

Analyst Opions/Technical Considerations

Analysts remain very bearish on Shutterfly. The current downtrend, started in October 2013, has been punctuated by unexpected upward and downward price gaps. On June 1, 2014, the stock closed at $43.51 then gapped upward to $49.70 the next morning. Since then, technical indicators signal a short-term bearish trend inside of an intermediate bullish trend. A recent bullish pennant pattern indicates the stock may breakout to the upside. The stock continues to trade in a narrow channel, finding support at $46.00 and resistance at $49.00. Based on analyst opinions and technical indicators, investors may want to hold off taking a position until the market has finished reacting to Shutterfly’s earnings announcement.


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