Shutterfly Reports Better-than-expected 4Q Profit

REDWOOD CITY, Calif. (AP) - Shares of Shutterfly Inc. surged during after-hours trading Wednesday after the photo sharing website said its fourth-quarter profit and revenue both widely beat Wall Street expectations. The company also issued a solid forecast for the current quarter and the rest of the year.

The stock rose $5.44, or 16 percent, to $40.82 during extended trading after closing at $34.31, up 88 cents.

The company's profit rose to $32.5 million, or $1.09 per share, during the quarter that ended Dec. 31. That compares with year-earlier profit of $24.1 million, or 88 cents per share.

Its adjusted net income amounted to $1.18 for the latest quarter. Analysts polled by FactSet were expecting adjusted earnings of $1.04 a share.

Revenue rose to $166.2 million from $131.1 million, beating the $153.8 million analysts were expecting.

The company, based in Redwood City, runs the website Shutterfly.com, where customers can store and share digital photos. People can also order prints or have their photos emblazoned on a host of products such as calendars and coffee mugs.

In fact, the company said that revenue from its personalized products and services business rose 33 percent to $123.8 million and now accounts for three-quarters of the company's total revenue.

The company's photo printing business grew 10 percent to generate a more modest $40.1 million in revenue.

During the quarter, existing customers accounted for 72 percent of the company's business. Throughout the quarter, the number of customers who visited the site and made a purchase rose 23 percent, compared with 24 percent throughout the year.

In 2010, the company's profit rose to $17.1 million, or 59 cents per share. In 2009, it earned $5.9 million, or 22 cents per share.

Revenue rose to $307.7 million from $246.4 million.

The company said that it expects to lose between 26 cents and 30 cents per share during the first quarter. Not counting one-time items, it expects a loss of 14 cents to 17 cents on $52 million to $53 million in revenue.

Analysts expect a first-quarter loss of 16 cents per share on $52.4 million in revenue, and an adjusted loss of 6 cents a share, according to FactSet.

For fiscal 2011, it expects to earn between 74 cents and 81 cents per share. Not counting one-time items, it expects to earn $1.16 to $1.24 per share on $363 million to $373 million in revenue.

Analysts expect full year earnings of 69 cents per share on $343.8 million in revenue and adjusted profit of 99 cents a share.