Watch CBSN Live

Snap shares tumble after disappointing earnings report

Snapchat update sparks backlash
Snapchat update sparks backlash 05:32

VENICE, Calif. - Snap (SNAP) on Tuesday reported a loss of $385.8 million in its first quarter. Investors reacted by immediately selling off the stock in after-hours trading following the earnings release. The shares were tumbling by around 16 percent.

The Venice, California-based company, owner of Snapchat, said it had a loss of 30 cents per share. Losses, adjusted for stock option expense and amortization costs, were 17 cents per share.

The results just met Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was also for a loss of 17 cents per share.

The company behind Snapchat posted revenue of $230.7 million in the period, missing Street forecasts. Ten analysts surveyed by Zacks expected $246.1 million.

Snap shares have decreased slightly more than 3 percent since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $14.13, a decrease of 36 percent in the last 12 months.

The site remains highly popular among younger users. According to eMarketer, Snapchat overtook both Instagram and Facebook (FB) in terms of total users aged 12 to17 and 18 to 24 for the first time last year. Snapchat also is adding younger users at a faster rate than Facebook, the largest social network.

However, a redesign of the Snapchat app earlier this year hasn't gone over well with users. At the time of the new design's unveiling, a Snap spokesperson said: "Updates as big as this one can take a little getting used to, but we hope the community will enjoy it once they settle in."

However, the first-quarter results didn't showing any growth spurt afterward.

View CBS News In
CBS News App Open
Chrome Safari Continue