OpenTable Inc. (OPEN), the San Francisco- based restaurant-reservation website, suffered the worst one-day stock drop ever after third-quarter sales missed analysts’ estimates.
OpenTable shares tumbled 14 percent to $37.11 as of 2:05 p.m. New York time. The stock, already down 39 percent this year through yesterday, fell as much as 17 percent to $35.60 earlier in the session -- the biggest decline since the company went public in May 2009.
The company has seen a slowdown in North America, where the persistent economic slump is putting a damper on dining out. OpenTable also is confronting rising employee costs and the threat of competition from partners. Google Inc., which works with OpenTable, pushed deeper into the market in September with the acquisition of the Zagat restaurant guides.
“Revenue growth in North America decelerated in part due to the slowdown in the restaurant industry,” said Clay Moran, an analyst at Benchmark Co. “The growing competition hasn’t hurt it yet, but might have more impact in the future.”
Revenue rose 40 percent to $34.4 million, the company said yesterday in a statement. Analysts had projected $35.8 million, according to Bloomberg data. Excluding some items, profit was 30 cents a share, matching predictions.
Moran has a “hold” rating on the stock and lowered his target price today to $50 from $60.
Operating expenses jumped 43 percent in the third quarter to $28.5 million at OpenTable, outpacing sales growth. The costs were fueled by a 51 percent increase in staff, the company said. Net income rose 5.8 percent to $4.06 million, or 17 cents a share, from $3.84 million, or 16 cents, a year earlier.
Toptable.com, a 2010 acquisition, helped boost international reservations, the company said. OpenTable works with a total of 23,866 restaurants, a 57 percent increase from the year-earlier third quarter. The number of seated diners who used the service climbed 48 percent to 23.6 million in the quarter.
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