Twitter’s Awful Guidance Tanks the Stock by 10%

Twitter1Social media giant Twitter Inc (NYSE:TWTR) posted decent second quarter earnings on Tuesday after the bell, but the real story was its terrible revenue guidance for the current quarter.

Q2 Profit Beats, but Revenue Misses

The San Francisco-based company posted second quarter net income or $0.13 per share, easily beating Wall Street estimates of $0.09. Revenue rose nearly 20% from last year to $602 million, missing analyst estimates of $607.41 million.

Average monthly users of its service rose 3% from last year to 313 million. Users were also up nearly 1% on a sequential basis.

Disastrous Guidance

The past is the past. Wall Street is all about the future.

Well, Twitter’s future doesn’t look too bright right now. The company forecast Q3 revenues of $590 to 610 million. Not only could that be a decline on a sequential basis, but it’s way below the average analyst estimate for $681.34 million.

Additional Notes

  • Advertising revenue totaled $535 million, an increase of 18% year-over-year.
  • Mobile advertising revenue was 89% of total advertising revenue.
  • Data licensing and other revenue totaled $67 million, an increase of 35% year-over-year.
  • U.S. revenue totaled $361 million, an increase of 12% year-over-year.
  • International revenue totaled $241 million, an increase of 33% year-over-year.
  • Total ad engagements were up 226% year-over-year.
  • Cost per engagement (CPE) was down 64% year-over-year.

Twitter shares plummeted $1.96 (-10.62%) in after-hours trading Tuesday to $16.49.


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