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LivePerson shares fall on weak 4Q guidance

NEW YORK (AP) -- Shares of LivePerson Inc. tumbled Wednesday after the company reported an adjusted third-quarter net income that matched Wall Street predictions, but issued a weaker-than-expected outlook for the current quarter.

THE SPARK: LivePerson, which provides online services, said late Tuesday that its third-quarter net income fell 41 percent to $1.6 million, or 3 cents per share. Excluding legal expenses, adjusted profit was 8 cents per share.

Revenue rose 15 percent to $39.7 million.

Analysts, on average, expected 8 cents per share on $41.1 million in revenue, according to FactSet.

The company expects to post an adjusted fourth-quarter profit of 7 to 9 cents per share on $41.5 to $42 million in revenue. Analysts forecast earnings of 10 cents per share and $44.7 million in revenue.

LivePerson also lowered the top end of its previous full-year earnings guidance by a penny, to a range of 30 to 33 cents per share. And it cut revenue guidance to a range of $156.5 million to $157 million from $160 million to $165 million.

Analysts expect profit of 33 cents per share on $161 million in revenue.

THE BIG PICTURE: New York-based LivePerson's cloud-based platform allows businesses to connect with their customers through websites, social media and mobile devices.

Also on Tuesday, the company said it agreed to buy Engage Pty Ltd., an Australian company that offers businesses cloud-based services. The deal is expected to close in the fourth quarter. Terms were not disclosed.

THE ANALYSIS: Benchmark analyst Mark Schappel cut his rating on the company's stock to "Hold" from "Buy." While he still believes in the company's long-term potential, he said it could take another two or three quarters before its bookings result in meaningful sales and profits.

Meanwhile analyst Richard Fetyko of Janney Capital Markets raised his rating for LivePerson to "Buy" from "Neutral," noting that the lower guidance and subsequent stock drop makes the shares more attractive.

"We remain confident in the business model, new product traction, strong demand as indicated by record bookings and increased sales productivity and strong competitive differentiation," Fetyko wrote in a note to investors.

THE SHARES: Down $1.59, or 10.8 percent, to $13.09 in heavy afternoon trading, after dropping as low as $11.62 earlier in the day. Over the past 52 weeks, the stock has traded between $10.76 and $19.60.