Shutterfly Inc. didn't lose as much money as analysts anticipated during the second quarter, offering hope that the online photo service will be able to grow even as more people post their favorite pictures on Facebook, Twitter and other social networking services.

The company said Wednesday that it lost $9.5 million, or 27 cents per share, during the three months ending in June. That was larger than a loss of $3.7 million, or 11 cents, per share at the same last year.

Nevertheless, Shutterfly's performance in the most recent quarter shaped up as pleasant surprise. That's because analysts surveyed by FactSet has predicted company would lose 34 cents per share.

Revenue for the period rose 31 percent from last year to $99 million to exceed analyst projections by $7 million.

Shutterfly's shares added 96 cents, or more than 3 percent, to $30.95 in extended trading after the numbers came out. Even so, Shutterfly's stock remains worth about half as much as it was a year ago.

The downturn largely reflects concerns whether there will still be a place for Shutterfly services in an era when billions of photos are being shared on Facebook and other social networking services where people congregate online to keep track of their friends and families. The trend hurts Shutterfly because it depends on people coming to its site to display their photos and eventually order prints that can be customized with a personal touch.

Shutterfly has been addressing the challenges by expanding into more niches. Besides its namesake website, Shutterfly also runs, and The 13-yearold company, which is based in Redwood City, Calif., is also hoping to expand its audience and increase its revenue growth with its recently completed $23.8 million acquisition of the Kodak Gallery, a competing online photo service that was auctioned off as part of Eastman Kodak Co.'s bankruptcy proceedings. That transfer completed earlier this month, after the second quarter closed.

To survive, Shutterfly will need to persuade its customers to order more prints of their photos for posterity's sake instead of simply relying on Facebook as a digital scrapbook.

Shutterfly made progress in the second quarter as its 1.9 million customers placed nearly 3 million orders. The total number of orders climbed 15 percent from the same time last year. The average price per order was $31.70 during the quarter, up slightly from $30.33 a year ago.

Despite the progress, Shutterfly expects to suffer another loss during the current quarter ending in September. Management predicted the loss will range from 41 cents to 44 cents per share on revenue of $89.5 million to $91.5 million.

Analysts, on average, had forecast a third-quarter loss of 35 cents per share on revenue of $92 million.

The company typically makes most of its money during the final three months of the year when customers are flocking to Shutterfly's site to order holiday cards and gifts.

For the full year, Shutterfly expects to earn 11 cents to 21 cents per share on revenue of $582 million to $592 million.