Blue Nile Shares Plunge on Earnings, Guidance Figures
July 29, 04
Shares in online jewelry retailer Blue Nile fell sharply yesterday (Wednesday) after the Internet merchant predicted disappointing earnings and announced a mixed quarterly report that left analysts uneasy.
Blue Nile, which has risen strongly following a successful initial public offering in May, plunged 18.1 percent to end the day at $27.25.
Although Blue Nile earned $1.9 million, or 11 cents a share, in the second quarter, which exceeded analysts' estimates by 2 cents per share, the earnings were down from $2.2 million, or 14 cents a share a year ago.
Similarly, revenues rose 29 percent on the same period last year to $35.0 million, but were slightly below analysts’ consensus estimates of $35.3 million.
Analysts were even more disappointed with the firm’s guidance – its earnings and profits forecasts - for the third quarter.
Blue Nile expects to earn 5 cents to 7 cents a share on sales of $32.5 million to $34 million compared with analysts’ predictions of 9 cents a share on $35.1 million in revenue for the third quarter.
Shares in Blue Nile soared 60 percent to $32.82 within two days of the firm’s May 19 floatation from an IPO price of $20.50.