Twitter falls after warning on revenue growth


  • Business
  • Friday, 27 Apr 2018

The Pew Research Center report found bots were a major source for diffusing information on news, sports, entertainment and other topics. — AFP Relaxnews

SAN FRANCISCO: Twitter Inc fell after warning that the pace of revenue growth will slow.

While beating earnings estimates for the first quarter, the social media company said it would be difficult to produce growth rates in the second half of the year that top those of 2017, when a broad-based recovery began. As a result, revenue growth will resemble that of 2016.

That sent the shares tumbling 7.7%, reversing earlier gains of as much as 14% when the quarterly earnings were first released before the market open.

Benchmark stock indexes were also volatile on Wednesday, as investors mulled the impact of rising bond yields and disappointing earnings. Twitter closed down 2.36% to US$29.75 in New York on Wednesday.

The caution put a damper on the nascent turnaround that saw Twitter remain in the black for the second quarter in a row after more than 16 quarters of losses. Twitter’s push into live video and more personalised content appears to be starting to pay off, boosting revenue and profit by luring users and advertisers.

Sales jumped 21%, the most in two years, to US$664.9mil in the first quarter, the company reported. Originally known for its 140-character posts, Twitter said monthly active users rose to 336 million, up by six million from the prior period.

“Twitter is still in rebuilding credibility mode with investors and advertisers, so it’s important they keep demonstrating momentum relative to expectations,” said Richard Greenfield, an analyst at BTIG.

Monthly user growth was up only 2.8% from a year ago, the slowest pace in two years. That contrasts with Facebook, which has six times more users than Twitter and increased its monthly users by 14% in the fourth quarter.

And more of Twitter’s growth is now coming from international markets as the US gets saturated. Monthly active users (MAUs) in the US increased by one million from the fourth quarter to 69 million. Internationally, MAUs grew to 267 million users from 262 million. Revenue in the US increased 2% year-over-year, while international revenue jumped 53%.

Chief executive officer Jack Dorsey, who also runs mobile payments platform Square Inc, has focused on making Twitter more useful, including streaming programming such as National Football League highlights and recaps of series like “Game of Thrones.”

The company is applying artificial intelligence to put the most relevant tweets at the top of people’s feeds, and has added features that curate tweets, photos and videos around events. Twitter said daily active users (DAUs) increased 10% in the recent period, marking the sixth consecutive quarter of double-digit increases. The company doesn’t give a total number for DAUs.

Dorsey has been honing the platform into a place to see “what’s happening now,” and positioning the site as the place to find out about live events from news to concerts.

Awareness of Twitter’s brand has also gotten a boost from frequent tweets by public figures like US President Donald Trump, who is among the platform’s most high-profile users. Global events like the Olympic games and government elections also help to drive user growth.

Twitter posted net income of US$61mil, or 8 US cents a share, in the first quarter, Marking its second quarter of profit under generally accepted accounting principles. That compared with analyst projections for a net loss of 2 US cents on average. Profit excluding some costs was 16 cents a share, exceeding estimates for 12 US cents.

The company gave a second-quarter outlook for adjusted earnings before interest, taxes, depreciation and amortisation of US$245mil to US$265mil. Analysts estimated US$218mil. — Bloomberg


Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 7
Cxense type: free
User access status: 3

Business , tech

   

Across The Star Online