Twitter tumbles after posting first results
Share price of micro-blogging site falls 10 per cent
Wednesday 05 February 2014
Twitter disappointed investors in its first earnings statement as a public company leading to its share price tumbling in late trading.
The micro blogging company said its revenue rose 116 per cent to $243m in the fourth quarter of 2013, but its share price fell more than 10 per cent in after-hours trading as investors worried about the slowing pace of growth in users of the service.
Twitter said its closely-watched number of average monthly active users (MAUs) were 241 million as of December 31, an increase of 30 per cent year-over-year.
But analysts pointed out that was only 3.8 per cent more than the previous quarter, and the stock price took a hit.
Further, analysts said Twitter's quarterly “Timeline Views”, its equivalent of page-views or a measure of user engagement, fell from about 159 billion to 148 billion - a number that disappointed many analysts.
“What this report will do is it will question how mainstream is Twitter as a platform,” Arvind Bhatia, an analyst at Sterne, Agee & Leach, told Reuters.
“Both in the US and internationally, the monthly active user base did not grow as fast as people thought, and that has an impact on the number of timeline views.”
This was Twitter's first quarterly earnings statement since going public in November at $26 a share. The stock climbed to around $70 in December.
It was trading around $65 before its results came out on Wednesday and fell to around $59 after the news.
Twitter said advertising revenue for the quarter rose 121 per cent to $220m, with mobile advertising making up more than 75 per cent of that total. International revenue soared 200 per cent to $66m.
For the fourth quarter, Twitter posted earnings of 2 cents a share, excluding items, in the fourth quarter, beating analysts' average expectations for a loss of 2 cents a share.
Looking forward, Twitter projected revenue for the first quarter of 2014 of $230 million to $240 million, and full-year revenue of between $1.15 billion and $1.2 billion.
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