Pinterest climbs 21% as revenue comes in as expected, Elliott offers backing

Pinterest (NYSE:PINS) $Pinterest, Inc.(PINS)$shares surged more than 21% in after-hours trading Monday after the image sharing and social-media company forecast mild third-quarter revenue growth and received some praise from its single-largest shareholder.

After U.S. stock markets closed, Pinterest (PINS) said in a statement that it expects its third-quarter sales "will grow [in the] mid-single digits on a year percentage basis." Pinterest (PINS) also said it sees expenses growing, and forecast operating expenses will grow in the low double digits on a quarter-over-quarter basis.

The outlook helped ease any immediate concerns about Pinterest's (PINS) second-quarter results in which the company fell short of earnings expectations, and its revenue just came in line with prior forecasts.

Pinterest (PINS) said that with the cost of revenue and expenses sharply rising, the company turned in earnings, excluding one-time items, of 11 cents a share or $666M in revenue, while analysts had forecast Pinterest (PINS) to earn 18 cents a share on almost $667M in sales.

During the same period a year ago, Pinterest (PINS) earned 25 cents a share, on revenue of $613.2M.

On a net basis, Pinterest (PINS) swung to a loss of $43.1M from a year-ago profit of $69.4M, while its loss from operations of $34.5M came after a prior-year profit of $71.2M.

New Pinterest (PINS) Chief Executive Bill Ready, who came on the job in late June, said the company's results were upbeat on an overall basis, and came in the face of ongoing uncertainty facing the online advertising market. Ready said Pinterest (PINS) accelerated its "investment in shopping and e-commerce this quarter," and praised the company's executives and employees for working "to continue to build a positive place on the Internet."

Still, Pinterest said user data saw a decline across the board, as global monthly active users [MAUS] dipped 5% to $433M. Regionally, U.S. MAUs fell 8% to 92M; European MAUs fell 4% to 117M; and "Rest of World" MAUs dipped 3% to 223M.

Pinterest also received strong support from top investor Elliott Management, which said Ready "is the right leader to oversee Pinterest's next phase of growth." Elliot also commended former Pinterest (PINS) CEO Ben Silbermann and the company's board of director for its handling of the leadership transition from Silbermann to Ready.

"We look forward to continuing our collaborative work with Ben, Bill and the board as they drive toward realizing Pinterest's full potential," Elliott said, in a statement.