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What's happening?
Shares of HomeAway (UNKNOWN:AWAY.DL) dropped more than 15% early Wednesday after the company turned in solid third-quarter results, but followed with weaker-than-expected guidance. 

Why it's happening
Quarterly sales jumped 29.9% year over year to $117.1 million, which translated to adjusted net income of $18.9 million, or $0.20 per share. Analysts, on average, were only expecting adjusted earnings of $0.16 per share on sales of $116 million.

HomeAway's revenue also exceeded its own previous guidance, which called for sales in the range of $114.5 million-$116.5 million. That performance included 27.2% growth in listing revenue to $75.9 million, and 44.2% growth in other revenue (think ancillary sales from owners and travelers, advertising, and software) to $20.5 million. Licensing revenue, in particular, was bolstered by a combination of a 33.8% jump in total paid listings to 1,034,847, and 11.9% growth in average revenue per listing to $479. Meanwhile, HomeAway saw total site visits in Q3 climb 17.3% year over year to 232.1 million.

For the current quarter, however, HomeAway sees revenue in the range of $107 million-$109 million. Consequently, HomeAway also lowered the top end of its full-year revenue guidance by $3 million, resulting in a new range of $444 million-$446 million. Analysts expected the sequential decline, but that fourth quarter range still falls well below expectations for sales of $112.34 million.

To be fair, management explained the impending shortfall is purely the result of foreign exchange rate calculations, which resulted in a $4 million hit to the top end of their guidance range. They then boosted that number by $1 million to account for their outperformance, which means this was actually a raise on an FX-neutral basis. In the end, the market may not see it that way, but I think investors should be pleased this isn't a symptom of a broader problem with HomeAway's business.