Shares of Weibo ( WB -6.34% ) were falling today after the Chinese microblogging site offered disappointing guidance in its third-quarter earnings report.
As a result, the stock was down 13% as of 1:33 p.m. EDT on Monday.
Weibo actually topped estimates in its third-quarter results, though the company continues to struggle with headwinds as China emerges from the depths of the COVID-19 pandemic.
Revenue in the quarter was flat, or down 4% in constant currency, to $465.7 million, but that was still ahead of expectations at $449.3 million. Advertising and marketing revenue, its core business, rose 1% to $416.7 million, but the company saw a decline in value-added services. Still, management noted a continued recovery with its key accounts and a record number of brand customers marketing with the company.
On the bottom line, adjusted earnings per share fell from $0.77 in the quarter a year ago to $0.66, which beat the analyst consensus at $0.60, but shows the overall business still moving in the wrong direction.
CEO Gaofei Wang said, "We are pleased with Weibo's recovery trend, despite challenges still persisted."
What seemed to turn off investors was Weibo's guidance for the current quarter as the company sees revenue growth of just 1% to 3%, which is below analyst estimates at 4.5% growth. Weibo's guidance also includes the impact of a small acquisition, which is expected to add 2% to its revenue.
Chinese stocks got whacked last week when the government announced an antitrust investigation into Alibaba, and they have continued to fall today. U.S. investors may be feeling wary about the sector after an earlier push from Congress to block U.S. listings of Chinese companies unless they comply with U.S. accounting laws. In that environment, Weibo's no-growth quarter and weak outlook aren't going to be enough to attract investors .