(Reuters) - Payments company Square Inc (SQ.N) on Wednesday forecast fourth-quarter adjusted profit below Wall Street estimates and its shares fell nearly 4 percent in after-hours trading.
The company, founded and led by Twitter Inc (TWTR.N) Chief Executive Officer Jack Dorsey, said it expects earnings of 12 cents to 13 cents per share for the final three months of 2018, while analysts were projecting 15 cents, according to IBES data from Refinitiv.
Square did report a higher-than-expected third-quarter profit, as it earned more from processing transactions and its push into financial services, including lending to small businesses.
The San Francisco-based company announced last month that its long-time Chief Financial Officer Sarah Friar was stepping down in December. Friar had steered the company through its blockbuster IPO in 2015 and news of her departure sent shares tumbling.
The search for a new CFO is being led by independent director David Viniar and board member Roelof Botha, Dorsey said on a call with analysts.
“That search has been progressing,” Dorsey said. “We will not be sharing a timeline, but we are working with urgency, and this is my No. 1 focus at the company, is to make sure we fill this role.”
Square, best known for its signature small white credit card readers that are plugged into smartphones, has been aggressively expanding into a wider range of financial services, such as lending.
In October the company made its first significant push into consumer credit by offering a new service that enables customers of its small-business clients to pay for purchases in installments.
For 2018, the company raised its adjusted core earnings expectation to between $250 million and $255 million from $240 million to $250 million. It also raised its adjusted earnings per share and total net revenue forecast for the year.
The company reported a 51 percent rise in total net revenue to $882.1 million for the third quarter.
Transaction-based revenue, which accounted for nearly 75 percent of total revenue, jumped 29 percent from a year earlier.
Net income was $19.6 million, or 4 cents per share, compared with a loss of $16.1 million, or 4 cents per share, a year earlier. (bit.ly/2ASqFIY)
On an adjusted basis, the company said it earned 13 cents per share, beating Wall Street estimates by 2 cents.
Square’s total operating expenses rose 55 percent mainly due to product development-related expenditures and its acquisition of Weebly.
Square shares fell to $79.66 in extended trading from a close at $82.69.
Reporting by Aparajita Saxena in Bengaluru and Anna Irrera in New York; editing by Anil D'Silva and Bill Berkrot