Investors can’t seem to decide if Twitter is roadkill on the Information Superhighway or a scrappy upstart carving out a niche in the social media landscape dominated by its much larger rival Facebook.
For now, the naysayers are prevailing. Shares of Twitter plummeted today after the micro-blogging site reported disappointing quarterly earnings and gave lackluster earnings guidance. They closed Thursday at $30.75, a decline of 21 percent. They are trading roughly $5 above the IPO price.
Shares of Twitter plummeted more than 20 percent Thursday after a disappointing earnings report. | Source: Yahoo Finance
Net income for the San Franciso-based company was $36.5 million, or 5 cents per share, compared with $789.2 million, or $1.02, a year earlier. Revenue rose 9 percent to $824 million, the smallest increase since 2017. Excluding one-time items, Twitter earned 14 cents. On that basis, analysts had expected a per-share profit of 20 cents on revenue of $874.03.
The company expects the problems it had with the ad business in the summer to linger into the current quarter. Revenue during that period will be between $940 million and $1.01 billion, well under the $1.05 billion analysts had expected.
Weaker-than-expected performance in July and August hurt Twitter along with malfunctions in its advertising software that helps marketers target consumers.
The company also continues to invest in its company and add employees, driving total costs and expenses up by 17 percent to $780 million.
“Unfortunately, we had some missteps,” Twitter Chief Executive Jack Dorsey told analysts during an earnings conference call. “I have a lot more confidence in our abilities and our team today than looking back just two years ago. We have a lot more agility.”
The company is continuing its crackdown on abusive Tweets.