NEW YORK: Twitter Inc forecast first-quarter revenue below Wall Street estimates and reported a drop in users for the fourth quarter on Thursday, sending its shares down 8 percent in early trading.
The social media company said its monthly active users declined due in part to its campaign of deleting millions of abusive accounts after facing criticism it was being used as a platform for political manipulation and hate speech.
For its current quarter, Twitter said it expected total revenue to be between US$715 million and US$775 million. The midpoint of that range was below analysts’ average estimate of US$765 million, according to IBES data from Refinitiv.
The company, however, reported a better-than-expected 24 percent increase in fourth-quarter revenue, helped by growth in its video advertising business.
Overall revenue rose to US$909 million in the quarter, beating the estimate of US$868.2 million.
Total advertising revenue rose 23 percent to US$791 million. More than half that revenue came from video ads placed by corporate clients.
Revenue from data licensing and other non-advertising businesses rose 35 percent from a year earlier to US$117 million.
Excluding some items, Twitter reported quarterly profit of 31 cents per share, beating the average estimate of 25 cents.
The number of average daily active users exposed to Twitter ads, a new figure disclosed by the company, rose to 126 million in the fourth quarter from 115 million a year ago and 124 million in the previous quarter.
Monthly active users totaled 321 million. That was in line with analysts’ forecasts, but down from 330 million a year earlier and 326 million in the third quarter. Twitter said that after the current quarter it would stop disclosing monthly active users, a statistic that has become standard among internet companies over the last decade.
Twitter said it expects operating expenses to rise about 20 percent year-on-year in 2019 due to efforts to improve its service, above analysts’ average estimate of 12 percent.
It expects capital expenditures to be between US$550 million and US$600 million, well above analysts’ average estimate of US$415 million for 2019.
(Reporting by Angela Moon and Munsif Vengattil; Editing by Jim Finkle and Bill Rigby)
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