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Wednesday, December 6, 2023

Twitter shares plunge more than 10%

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Twitter has said earnings missed market forecasts for the final three months of the year, and warned that advertising sales will continue to lag due to competition.

The social media giant reported a 1% increase in revenues to 717 million US dollars (£571 million) in the three months to December 31, while markets had pencilled in 740 million US dollars (£589 million).
Twitter said it expects advertising revenue growth to continue to drag behind audience growth in the year ahead.

“Advertising revenue growth may be further impacted by escalating competition for digital ad spending and Twitter’s re-evaluation of its revenue product feature portfolio, which could result in the de-emphasis of certain product features,” the company said.

Net losses ballooned to 167 million US dollars (£133 million) in the fourth quarter, compared with 90 million US dollars (£717 million) a year earlier.

However, on an annual basis, that number dropped from 521 million US dollars (£415 million) in 2015 to 456.8 million US dollars (£363.8 million) for 2016.

It is now forecasting adjusted earnings to come in between 75 million US dollars (£59 million) and 95 million US dollars (£76 million) for the first quarter.

That is less than half of the 215 million US dollars (£171 million) in adjusted earnings reported in the fourth quarter.

The news sent Twitter’s New York-listed shares plunging more than 10.5% in pre-market trading.
Twitter tried to direct attention instead to a 4% year-on-year jump in average monthly active users to 319 million in the final three months of the year, compared with 317 million in the third quarter.

Chief executive Jack Dorsey said: “We overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage.”

He added: “While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service. This will take time, but we’re moving fast to show results.”

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