Square stock falls 6% after fourth-quarter outlook disappoints

Australian dollars in Sydney, Friday, Jan. 15, 2016. (AAP Image/Joel Carrett) NO ARCHIVING

Shares of Square Inc. SQ, +6.96% fell more than 6% in the extended session Wednesday after the payments company reported better-than-expected third-quarter adjusted earnings and sales, but forecast fourth-quarter adjusted earnings below analyst forecasts. Square tweaked higher its 2018 guidance, and said it expects fourth-quarter per-share adjusted earnings between 12 cents and 13 cents, contrasting with Street expectations of an adjusted EPS of 15 cents for the fourth quarter. Square said it earned $20 million, or 4 cents a share, in the third quarter, versus a loss of $16 million a year ago. The net income includes a gain of $37 million in connection with Eventbrite Inc. EB, +4.43% initial public offering in September. Adjusted for one-time items, Square earned 13 cents a share, compared with 7 cents a share a year ago. Adjusted sales rose 68% to $431 million, compared with $257 million a year ago. Analysts polled by FactSet had expected adjusted earnings of 11 cents a share on sales of $414 million. Square increased its forecast for 2018 adjusted revenue to between $1.569 billion and $1.574 billion, compared with a previous guidance of adjusted revenue between $1.52 billion and $1.54 billion. The company said it expects adjusted EPS between 45 cents and 46 cents for 2018, versus an earlier expectation of adjusted EPS between 42 cents and 46 cents. The guidance was adjusted "to reflect the ongoing momentum of our business," Square said in a letter to shareholders. Shares of Square ended the regular session up 7%.

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