NEW YORK (AP) — Twitter beat Wall Street's earnings and revenue expectations in its first quarter as a public company. But investors were looking for more — including faster user growth — and the company's stock fell more than 17 percent in after-hours trading Wednesday.
Twitter's shares fell $11.37, or 17.2 percent, to $54.59 in extended trading after the results came out. The stock, which peaked at $74.73 on Dec. 26, closed Wednesday's regular trading session at $65.97.
Twitter ended the final quarter of 2013 with 241 million monthly users, up 30 percent from a year earlier. But Twitter's growth is slowing. The company added just 9 million new monthly users in the fourth quarter, only 1 million of which came from the U.S. That's a deceleration from earlier in the year, when the company was adding an average of 16 million new accounts each quarter.
Another closely watched metric, which measures how engaged users are with Twitter, declined during the quarter, further spooking investors. Twitter said its "timeline views," or how many times users refresh Twitter feeds, visit Twitter or look at search results, declined 7 percent from the previous quarter, to 148 billion from 159 billion.
CEO Dick Costolo sought to be reassuring during the company's conference call with investors and analysts. He said changes Twitter made to the short messaging service during the fourth quarter are starting to pay off. For example, users are retweeting more posts and marking more of them as a "favorite."
Costolo added that Twitter is rolling out "a number of improvements" expected to boost user growth and retention. He said the company will make it easier for people to start using the service and will also attempt to bring back inactive users.
"We think there's a lot we can do to significantly improve the user experience over the course of the year in 2014," he said.
Twitter reported a loss of $511 million, or $1.41 per share, in the October-December quarter. That compares with a loss of $8.7 million, or 7 cents per share, a year earlier. Adjusted earnings were 2 cents per share.
Twitter's revenue more than doubled to $243 million from $112 million.
Analysts, on average, had expected an adjusted loss of 2 cents per share and revenue of $218.1 million, according to FactSet.
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