Belfast Telegraph

Donald Trump tweets not yet making Twitter great again as shares plunge

Twitter shares plunged after it reported losses widened amid a drop in ad sales, dashing hopes US elections and Donald Trump's tweeting frenzy would boost earnings.

The social media giant said net losses ballooned to 167 million US dollars (£133 million) in the fourth quarter, compared to 90 million US dollars (£71 million) a year earlier, as advertising sales fell slightly to 638 million US dollars (£507 million).

It dragged on total revenues for the three months to December 31, which rose only 1% to 717 million US dollars (£571 million).

Markets had pencilled in a rise to 740 million US dollars (£589 million).

The news sent Twitter's New York-listed shares plunging 10% at the start of trading.

Twitter tried to direct attention instead to a 4% year-on-year jump in average monthly active users to 319 million, compared to 317 million in the third quarter, but cautioned ad revenues would continue to lag behind audience growth amid "escalating competition".

Chief executive Jack Dorsey said: "We overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage."

He added: "While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service.

"This will take time, but we're moving fast to show results."

Investors had hoped Twitter would have benefited from the social media frenzy around the US presidential election and Mr Trump's surprising win.

Colin Cieszynski, chief market strategist at CMC Markets, said: "Despite the company's services getting a lot of attention and publicity through the election campaign and President Trump continuing to use Twitter to make pronouncements, sales came in short of expectations."

Twitter is now forecasting adjusted earnings to come in between 75 million US dollars (£59 million) and 95 million US dollars (£76 million) for the first quarter.

That is less than half of the 215 million US dollars (£171 million) in adjusted earnings reported in the fourth quarter.

The social media giant stopped short of providing forecasts for full-year earnings, but said total expenses would be flat or down as much as 5% compared to 2016.

Twitter announced plans for a costly company-wide shake-up back in November that included 347 job cuts, in hopes of recording a profit in 2017.

It pushed restructuring costs to 101 million US dollars (£80 million) for 2016, up from 12.9 million US dollars (£10.2 million) a year earlier.

Reports emerged last year Twitter had been in talks with several companies about a possible takeover, with Google and among the firms said eyeing the microblogging site.


From Belfast Telegraph