What happened?

Shares of Shutterfly Inc. (NASDAQ:SFLY), a leading retailer and manufacturing platform for professional and personal photography, are down 12% as of 11:15 a.m. EDT after announcing disappointing third-quarter results Wednesday.

So what

Starting from the top, net revenue checked in at $369 million, which fell short of analysts' estimates calling for $377 million. Part of the top-line miss was due to weakness in Shutterfly's consumer segment, which posted a 6% decline compared to the prior year. Adjusted earnings per share checked in at a loss of $2.12 per share, better than analysts' estimates of a $2.42 loss. Management also lowered its fourth-quarter net revenue guidance to a midpoint of $970 million, down from the prior $982 million, and reduced its earnings-per-share guidance to $5.36 from the prior $5.89-per-share level.

A person sorting through a pile of photographs.

Image source: Getty Images.

"Our results in the third quarter were mixed, with strong performance in Lifetouch and solid results in SBS offset by disappointing performance in Shutterfly Consumer. Coming out of the quarter, we've identified clear opportunities to improve the consistency of our results in Shutterfly Consumer," said Christopher North, president and chief executive officer, in a press release.

Now what

Thanks to the Lifetouch acquisition, it's been a wild ride for investors throughout 2018.

SFLY Chart

SFLY data by YCharts.

Investors will want to realize some of the synergies and benefits from that acquisition, including the closing of two Lifetouch facilities in 2019 that will consolidate into existing Shutterfly facilities and reduce the company's reliance on temporary labor. Until management can generate those acquisition synergies or provide a better-than-expected holiday season, today's 12% decline is understandable.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.