Pinterest Stock Falls After Earnings Miss. Advertisers Pulled Back.

Pinterest missed second-quarter earnings estimates. (Gabby Jones/Bloomberg)

Pinterest stock was down sharply Thursday after the photo-sharing website reported disappointing second-quarter earnings.

Pinterest reported earnings of 33 cents a share on revenue of $998.2 million. Analysts surveyed by FactSet were expecting earnings of 35 cents a share on revenue of $974.9 million.

Pinterest also said it expects third-quarter revenue to be between $1.033 billion to $1.053 billion, compared with Wall Street estimates of $1.027 billion.

Shares were down 11% in after-hours trading. Expectations were high as the stock has jumped 35% this year, while the S&P 500 has risen 7.8%.

Investors have been excited about the company’s exposure to artificial intelligence, especially when it comes to improving user and advertiser experiences. This includes Pinterest’s visual search tools for users and Performance+ suite, which uses AI to help advertisers simplify campaign creation.

When looking at the most recent earnings reports from Meta Platforms and Alphabet , the digital advertising market—ads that go to social media and other digital channels—had seemed strong. However, Pinterest management said on the earnings call Thursday that in the second-quarter, “Asia-based e-commerce retailers pulled back spend in the U.S. tied to the change in the de minimis exemption.”

The exemption previously allowed lower-cost goods to come into the U.S. without being subject to tariffs, but was ended by President Donald Trump. As companies have to pay more to import goods, they might choose to cut back their ad budgets, or focus those budgets instead on platforms with the most users, like Facebook and Google.

Pinterest isn’t the only social media company to report a negative impact from the de minimis change. Snapchat parent Snap Inc. said on Aug. 5 that its top-line growth was “impacted by a number of factors” in the second quarter, including updates to the de minimis exemptions.

Write to Angela Palumbo at angela.palumbo@dowjones.com