SAN FRANCISCO (AP) — Shares of Yelp Inc. took a beating Thursday after the online-reviews site reported soft third-quarter sales and indicated the current period would also be weak.
Yelp's stock was down $12.50, or 29 percent, to $31 in after-hours trading.
CEO Jeremy Stoppleman blamed the revenue miss on the company's new non-term advertising, intended to encourage advertisers to try the site without being tied to longer-term contracts.
"While the shift to non-term advertising has opened our sales funnel, it has also made our results more sensitive to short-term operational issues," Stoppleman said in a new release. He said the company said expected revenue would also take a hit in the fourth quarter.
The San Francisco-based company reported revenue of $241.1 million in third quarter, up from $223 million during the same period a year ago. That was below Wall Street expectations of $245.4 million, according to Zacks Investment Research.
Yelp posted profits of $15 million, or 17 cents a share. Earnings, adjusted for stock option expense, came to 43 cents per share. That was above the 35 cents per share expected by analysts.
Elements of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on YELP at https://www.zacks.com/ap/YELP