Twitter Gives Disappointing Fourth-Quarter Revenue Forecast
Online social networking service provider Twitter Inc. recently gave a disappointing fourth-quarter revenue forecast. The San-Francisco based company also reported a lower than expected user growth.
Recent forecast by the company came even after Twitter beat third-quarter profit revenue estimates. The latest forecast suggests that the company still needs some more time for a turnaround as social media competition from Facebook Inc’s Instagram and Messenger apps has grown.
Twitter on Tuesday gave a forecast of $695 million and $710 million, which was quite below the analysts’ average estimate of $739.7 million according to Thomson Reuters I/B/E/S.
Company executives gave no reason for lowering the forecast. But according to analysts this could have been due to slower user growth. Also growth of Instagram’s advertising share after opening up its platform to all advertisers in September.
Twitter had average active monthly users of 320 million in the third quarter, which was up from 316 million in the prior quarter. Analysts estimated active monthly users of 324 million.
This is the company’s first earnings after Jack Dorsey returned in early October as its permanent chief executive. Jack as company’s CEO delivered a downbeat view of twitter’s earnings and criticized its product lineup.
PureFunds CEO Andrew Chanin, a Twitter shareholder, said, “People that were making a huge bet on Dorsey shaking things up within five months of being there may be disappointed. With a company like Twitter, there's a huge risk to making any big changes”.
Shares of Twitter fell to $27.38 in extended trading after closing at $31.34 on the New York Stock Exchange.
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