What's happening: Shares of MercadoLibre (NASDAQ:MELI), an e-commerce company operating in 13 Latin American countries, sank on Thursday after the company reported mixed second-quarter results. Revenue came in at $154.3 million, up 17% year over year and about $7 million higher than analysts were expecting. However, the company missed big on earnings, reporting EPS of $0.44, down significantly year over year and $0.24 shy of the average analyst estimate. Down as much as 10% at market open, by noon Thursday the stock was down about 7.5%.

Why it's happening: The strong U.S. dollar is having a severe negative effect on MercadoLibre's results. Revenue increased by 88.3% year over year in local currencies, but this was reduced to just 17% growth in U.S. dollars. Venezuela was particularly challenging in regards to currency; excluding Venezuela, revenue would have grown by 28.9% year over year in U.S. dollars.

Despite this, the company still grew revenue faster than analysts were expecting. Earnings, though, were another story. Excluding a one-time charge the company took during the second quarter of 2014 related to Venezuela, adjusted net income declined in U.S. dollars by 38.7% year over year. Gross margin declined to 67.4%, down from 72.4% during the same period last year, and operating expenses, excluding the one-time charge, grew far faster than revenue, jumping 33.7% year over year in U.S. dollars.

MercadoLibre grew extremely fast in local currencies, but the strong U.S. dollar is wreaking havoc on the company's top and bottom lines. A big earnings miss sent the stock tumbling, but investors will need to wait for these currency issues to subside before getting a clear picture of the company's performance.