Pinterest Inventory: Outperforms Sales in Difficult Advertising Market

Pinterest (PINS) on Monday reported second-quarter results that missed profit but outperformed sales in a difficult market. The Pinterest earnings report came after the market closed, when the stock rose.

The social media company reported adjusted earnings of 11 cents a share on revenue of $666 million. Analysts expected a profit of 18 cents on revenue of $665 million, according to FactSet.

While Pinterest reported earnings, activist investor Elliott Investment Management declared itself the company’s largest shareholder.

“Pinterest is a highly strategic company with significant growth potential, and our belief in Pinterest’s value creation has led us to become the company’s largest investor,” Elliott said in the announcement. “As a market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems.”

Pinterest shares were up 20%, nearly midnight, in after-hours trading in the stock market today.

The Pinterest revenue report comes at a time when the company and its colleagues are grappling with a slowdown in ad spend, its main source of revenue.

Pinterest inventory: reasons for ad lag

Reasons for the advertising slowdown include increased competition and a weak economic environment.

Advertisers in a wide variety of industry groups have expressed concerns regarding the macro environment. Those concerns include ongoing supply chain disruptions, rising input costs, inflation, economic concerns due to rising interest rates and concerns related to geopolitical risks posed by the war in Ukraine.

Another big problem is that Apple (AAPL) has changed ad tracking on its operating system. Consumers gained more privacy, but advertisers lost valuable user tracking data. The change has cost social media stocks billions in lost revenue. It is unclear how long the impact of these problems will last.

“What we’re hearing from advertisers, I think more specifically when it comes to ad budgets, is what we said earlier, which is that they’re taking this time, given all this other macro pressure, to re-evaluate their priorities to make sure they are making the right investments in the right places,” RBC Capital Markets analyst Brad Erickson said in a note to clients.

“We accelerated our investments in shopping and e-commerce this quarter, and I am excited about the commitment of our leaders and employees to continue building a positive place on the web,” said Chief Executive Bill Ready, in written comments with the Pinterest earnings report. .

Since hitting an all-time high of 89.90 on Feb. 19, Pinterest shares have fallen about 78%.

Follow Brian Deagon on Twitter at: @IBD_BDeagon for more information on technology stocks, analysis and financial markets.


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