What

Shares of online car-buying service TrueCar (NASDAQ:TRUE) were sharply lower in early trading on Wednesday after the company reported third-quarter earnings results that missed Wall Street estimates and fell short of its own guidance. 

As of 12 p.m. EST, TrueCar's shares were trading at $9.54, down 16.9% from Tuesday's close.

So what

Taken by themselves, TrueCar's third-quarter earnings weren't bad. Revenue grew 14% from the third quarter of 2017, adjusted core profit rose 25%, and the number of dealers in TrueCar's network and vehicles purchased via its service were both up solidly year over year.

The entrance to TrueCar's headquarters in Santa Monica, California.

Image source: TrueCar, Inc.

But the company's adjusted net income per share, excluding employee stock-option expenses, fell short of Wall Street estimates at $0.04 per share. Analysts had expected TrueCar to report adjusted net income of $0.05 per share.

What's more, TrueCar missed its own guidance on one metric and barely made it on two more. TrueCar's revenue and adjusted earnings before interest, tax, depreciation, and amortization (adjusted EBITDA) both fell near the bottom of the guidance ranges it had given with its second-quarter results. Worse, its total units, or vehicles sold via its service, fell short of its guidance range by a surprising margin. (TrueCar guided to total units of between 274,000 and 279,000 in the third quarter; it reported just 268,026.)

Now what

TrueCar reset its full-year guidance for revenue, adjusted EBITDA, and units on Tuesday. It still expects to outperform its 2017 results on all three metrics, but the guidance ranges are lower than they had been earlier in the year. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends TrueCar. The Motley Fool has a disclosure policy.