BUSINESS

Twitter Stock Tumbles After Earnings Results Released Early

04/28/2015 03:59 EDT | Updated 06/28/2015 05:59 EDT
NEW YORK, N.Y. - Twitter's stock dropped sharply as the company's revenue and outlook fell short of expectations at a time investors are looking for stronger advertising growth to make up for less-than-stellar user numbers.

Twitter's adjusted earnings for the first quarter topped Wall Street estimates but revenue fell short of expectations and of Twitter's own guidance.

The company posted a loss of $162 million, or 25 cents per share, in the January-March period. That compares with a loss of $132 million, or 23 cents per share, a year earlier. Adjusted earnings were 7 cents per share. Analysts polled by FactSet were expecting 4 cents.

Twitter's revenue rose 74 per cent to $436 million from $250 million a year earlier. Analysts had expected $456 million.

Twitter's user growth pace has been lagging behind other popular social media companies, but for the most part the company has been able to make up for that by making a lot of money from the users it has. That's why the revenue miss, and the lowered outlook, disapointed investors.

The company now expects revenue of $470 million to $485 million for the second quarter. Analysts were looking for $538 million. For the full year, Twitter is predicting $2.17 billion to $2.27 billion, below analysts' average forecast of $2.37 billion.

Twitter accounted for less than 1 per cent of the $145 billion digital advertising market last year, according to research firm eMarketer. In comparison, Facebook's share was nearly 8 per cent and Google's was more than 31 per cent.

Twitter had 302 million average monthly users in the first quarter, up 18 per cent from the previous year. About 80 per cent of these users accessed the site on mobile devices at least once a month. By contrast, Facebook reported 1.44 billion monthly users last week. Cantor Fitzgerald analyst Youssef Squali said that "user growth remains key" for Twitter over the long term. Twitter's user growth met his expectations, and he called the sequential 14 million new users a "significant uptick" compared to the fourth-quarter's disappointing 4 million additions.

Trading in Twitter's stock was halted Tuesday afternoon after word spread that earnings were released prematurely, before the market closed. When trading resumed, the stock fell more than 25 per cent. By the time the stock market closed, Twitter's shares were down $9.39, or 18.2 per cent, at $42.27. That's still up nearly 17 per cent year-to-date.

Some reports said the earnings leaked out when research firm Selerity tweeted the results. Selerity said the report was "sourced" from Twitter's website and was not the result of a "leak" or "hack." Twitter later posted the results on its website and emailed it to reporters. Twitter said it was investigating the leak.

Also on HuffPost

  • US President Barack Obama
    Barack Obama/Flickr
    US President @BarackObama is the world's most followed leader on Twitter, according to the Twiplomacy Study 2015. He has a following of 56,933,515 people.
  • Pope Francis
    ASSOCIATED PRESS
    Pope Francis (@Pontifex) has 19,580,910 followers on his nine different language accounts.
  • Indian Prime Minister Narendra Modi
    ASSOCIATED PRESS
    According to the study, since his election in May 2014, the Indian Prime Minister @NarendraModi has skyrocketed into third place on this list of Twitter's most popular world leaders.
  • Indian Foreign Minister Sushma Swaraj
    Pool via Getty Images
    The second Indian in this list, India’s @SushmaSwaraj is the most followed foreign minister with 2,438,228 followers.
  • UAE Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan
    MOHAMED EL-SHAHED via Getty Images
    UAE Foreign Minister, Sheikh Abdullah bin Zayed Al-Nahyan who has been on Twitter since 2009 is well behind Sushma Swaraj, with 1,608,831 followers, according to the study.
  • Turkish Foreign Affairs Minister Mevlüt Çavuşoğlu
    ASSOCIATED PRESS
    The Turkish Foreign Affairs (@MevlutCavusoglu) has a following of 376,429 followers.
  • Rwandan President Paul Kagame
    ASSOCIATED PRESS
    Rwandan President Paul Kagame (@PaulKagame) has become Africa’s most followed president with 8,42,260 followers, says the study.
  • Turkish President Recep Tayyip Erdoğan
    ASSOCIATED PRESS
    The Turkish President is the fourth most followed world leader, after Narendra Modi (India's Prime Minister). Twitter's 2014 Transparency Report also showed that Turkey filed over five times more content removal requests than any other country in the second half of 2014.
  • Mexican President Enrique Peña Nieto
    ASSOCIATED PRESS
    The Mexican President is one of the 10 most followed world leaders on Twitter, and the most followed Latin American leader with 3.89 million followers.
  • Colombian President Juan Manuel Santos
    ASSOCIATED PRESS
    The Colombian President joined Twitter in 2009. Today his Twitter account boasts a following of over 3.6 million.
  • Argentinian President Cristina Fernández de Kirchner
    STAN HONDA via Getty Images
    Cristina Fernández de Kirchner (@CFKArgentina) is the the third most followed political leader in Latin America.
  • Brazilian President Dilma Rousseff
    EVARISTO SA via Getty Images
    Brazilian President Dilma Rousseff (@dilmabr) has 3.45 million followers on Twitter.
  • Venezuela President Nicolás Maduro
    ASSOCIATED PRESS
    Venezuela's President Nicolás Maduro follows 73 people, but has a following of 2.34 million people.
  • Kenyan President Uhuru Kenyatta
    World Economic Forum/Flickr
    According to the story, since his appointment as Kenya's President, the Kenyan government has really taken to the 'digital age. Uhuru Kenyatta, according to the study, has 781,929 followers.
  • UK Prime Minister David Cameron
    WPA Pool via Getty Images
    The study shows that The UK Prime Minister David Cameron (@Number10gov) is the most followed EU leader with over 3 million followers.
  • Italian Prime Minister Matteo Renzi
    PHILIPPE HUGUEN via Getty Images
    Italian Prime Minister Matteo Renzi joined in 2009, however has is only half as popular as the UK Prime Minister with over 1.7 million followers.