October 30, 2007 / 9:13 PM / 11 years ago

UPDATE 1-Shutterfly posts wider Q3 net loss

Oct 30 (Reuters) - Online photo-sharing company Shutterfly Inc (SFLY.O) posted a wider quarterly loss on increased costs, sending shares down 10 percent.

Net loss for the third quarter was $3.3 million, or 14 cents a share, compared with a net loss of $2.7 million, or 70 cents a share, a year ago. The company had a higher number of weighted average shares in the latest quarter.

The Redwood City, California based-company, which went public in September 2006, said revenue rose 54 percent to $32.6 million. Total operating expenses rose 43 percent to $22 million.

Analysts on average expected the company to post a loss of 16 cents a share, before exceptional items, on revenue of $31 million, according to Reuters Estimates.

The company expects fourth-quarter revenue of $90.5 million to $93.5 million and fiscal 2008 revenue of $240 million to $255 million.

Analysts were expecting fourth-quarter revenue of $92.9 million and fiscal 2008 revenue of $244 million.

Shutterfly competes with Eastman Kodak’s EK.N EasyShare Gallery, Hewlett-Packard Co’s (HPQ.N) Snapfish and Google Inc’s (GOOG.O) Picasa.

The online photo industry is in the midst of a market shakeout. Yahoo Inc YHOO.O is shutting the Yahoo Pictures service to support its Flickr social networking site. Imagestation, run by Sony Corp (6758.T), is set to close, as are smaller sites such as Filmloop, PhotoTLC and Clubphoto.

Shares of the company were down at $32.75 in late electronic trade, after closing at $36.40 Tuesday on the Nasdaq. (Reporting by Purwa Khandelwal in Bangalore)

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