Mixed day for Twitter: shares drop 13% as company reports a loss
Twitter shares were down as much as 13 per cent in after-hours trading yesterday after the company reported weak user growth in the fourth quarter, and forecast slower revenue and profit gains in 2014.
Big day for Twitter:but some some are disappointed
The microblogging company said revenue for the quarter, which ended 31 December, was $243m, up 116 per cent from $112m in the fourth quarter of 2012.
But Twitter reported a net loss of $511m, compared with an $8.7m loss a year ago.
However, excluding stock-based compensation and other expenses, the company reported a profit of $9.7m, or two cents a share, in the quarter, compared with a loss of $271,000 a year ago.
Twitter beat Wall Street expectations for revenue and profit in the fourth quarter. Analysts had on average expected the company to report a fourth-quarter loss of 2 cents a share and revenue of $218m.
Dick Costolo, Twitter’s chief executive, declared in a statement, “Twitter finished a great year with our strongest financial quarter to date. We are the only platform that is public, real-time, conversational and widely distributed and I’m excited by the number of initiatives we have under way to further build upon the Twitter experience.”
Twitter boldly gave a financial forecast for both the first quarter and all of 2014. The company said it expected first-quarter revenue of $230m to $240m. For the full year, it expects revenue of $1.15bn to $1.2 billion, nearly double the $665m in 2013.
But these figures appeared to disappoint some investors, many of whom had high expectations for the company ahead of the financial report. Shares of the microblogging company have risen from the I.P.O. price of $26 to as high as $74.73 in December
Shares closed at $65.55 in regular trading on Wednesday, down 1 per cent, but fell by a double-digit percentage in after-hours trading following the release of the results.
Twitter had 241 million monthly users globally in December, slightly up from 232 million at the end of September. On advertising the company said it brought in $1.49 per 1,000 views, compared to 97 cents in the third quarter, a 50 per cent increase
The average revenue generated by a user clicking from Twitter to a retailer’s website grew to 83 cents in the quarter, up 131 percent compared to a year ago, according to Adobe’s analysis.
Another plus for Twitter: Data released data on Wednesday showed that people using Twitter while watching television shows were more likely to stay tuned in during the commercials, remember the ads and express an intent to buy the products advertised, compared to people simply watching the show.