Shares of online car-shopping service TrueCar (NASDAQ:TRUE) were hammered on Friday, after the company reported fourth-quarter and full-year 2018 earnings that fell short of its own guidance and gave a cautious outlook for the first quarter of 2019.
As of noon EST on Friday, TrueCar's shares were trading at $7.87, down 23% from Thursday's closing price.
TrueCar reported its fourth-quarter and full-year 2018 earnings after the bell on Thursday, and they were the not-good kind of surprise. Revenue, adjusted earnings before interest, tax, depreciation, and amortization (adjusted EBITDA), and vehicles sold via TrueCar's service (units) all fell short of the guidance it gave with its third-quarter earnings report in November.
CEO Chip Perry blamed some of the shortfall on "operational issues" related to a systems upgrade. TrueCar rolled out a new technology platform during the quarter, and many of its clients -- as well as TrueCar itself -- experienced problems migrating from the old systems to the new ones.
Those operational issues explained why average monthly unique visitors to TrueCar's website fell by 10% from a year ago. There was an additional factor, Perry said: Some new business that the company had expected in the later part of the quarter didn't materialize.
While TrueCar's guidance calls for revenue to increase year over year in the first quarter, it expects adjusted EBITDA to decline year over year. Its guidance for 2019 is a bit more upbeat, calling for incremental increases in both revenue and adjusted EBITDA.