Twitter Q4 Results Beat View; But Stock Falls On Outlook

(RTTNews) - Micro-blogging site Twitter Inc. (TWTR) on Thursday reported a profit for the fourth quarter that more than doubled from last year. Both revenue and adjusted earnings per share for the fourth quarter beat analysts' estimates.

However, Twitter's average monthly active users or MAU figure declined from the year-ago period. In addition, Twitter provided a light revenue outlook for the first quarter and said it will discontinue reporting MAU going forward. The company's shares are losing more than 7 percent in pre-market activity.

Twitter's fourth-quarter net income surged to $255.30 million or $0.33 per share from $91.08 million or $0.12 per share in the year-ago period.

On an adjusted basis, earnings were $244.14 million or $0.31 per share, compared to $141.41 million or $0.19 per share last year.

On average, 31 analysts polled by Thomson Reuters expected earnings of $0.25 per share. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 24 percent to $909 million from $732 million last year and beat analysts' consensus estimate of $869.5 million. Revenues grew 26 percent on a constant currency basis.

Twitter said its average monthly active users or MAU was 321 million in the fourth quarter, down from 330 million in the year-ago period and also down from 326 million in the preceding quarter.

The company noted that average MAU was impacted by product changes that reduced the number of email notifications sent, in addition to decisions made by the company to prioritize the health of the service and not move to paid SMS carrier relationships in certain markets. To a lesser extent, changes made by Twitter to comply with the General Data Protection Regulation or GDPR in Europe also impacted average MAU.

However, average monetizable daily active users or mDAU were 126 million for the quarter, up 9 percent from 115 million in the prior-year quarter and also up from 124 million in the previous quarter, with double-digit growth in five out of the company's top ten global markets.

Twitter said that the increase in average mDAU was driven by a combination of organic growth, marketing, and product improvements.

For the first quarter, Twitter forecast operating income between $5 million and $35 million, and revenue between $715 million and $775 million. The Street expects the company to report revenues of $762.43 million for the quarter.

Twitter also said it will discontinue reporting MAU, as mDAU will be its audience and engagement metric going forward.