Twitter tumbles as costs increase for 2019
Twitter shares fell more than 10% in early trading on Thursday after the social media network published fourth-quarter 2018 earnings and guided to weaker than expected revenue and higher costs for the coming months.
Twitter Inc
$53.70
11:00 08/03/24
The fourth quarter revenue of $909m jumped 24% compared to last year and beat estimates of $868.1m. For the whole of 2018, revenue exceeded $3bn, an increase of 25% year-over-year.
Net income was $244m compared to $141m in the same period of the previous year, representing a non-GAAP net margin of 27%. Earnings per share of $0.31 were above the expected $0.25, beating the quarterly profit forecast.
Twitter also revealed that the monthly active users totalled 321m on the fourth quarter which was in line with the analysts’ expectations but down from 330m a year earlier. The average monetizable daily active users rose to 126m in the last quarter, up from 115m a year ago and 124m in the third quarter.
Management said they expect total revenue of between $715m and $775m for the first quarter of 2019. The midpoint of that range was below analysts’ average estimate of $765m, according to Refinitiv data.
Operating expenses were expected to rise by 20% year-on-year in 2019 due to efforts to improve the health of its platform, going over analysts’ average estimate of 12%.
The company expects stock-based compensation expense to be in the range of $350m to $400m and capital expenditures to be between $550m and $600m.