SAN FRANCISCO (AP) — Twitter booked a net loss in the first quarter because of stock compensation costs, but its results surpassed Wall Street's expectations thanks to a sharp increase in advertising revenue.
But shares of the short messaging service dropped sharply after the results came out because of investor concern about its ability to grow its user base and keep its existing users engaged.
Twitter Inc. said Tuesday that it had a loss of $132.4 million, or 23 cents per share, in the January-March quarter. That compares with a loss of $27 million, or 21 cents per share, a year ago when Twitter was still privately held. Adjusted earnings were $183,000, or roughly breakeven on a per share basis.
Revenue more than doubled to $250 million from $114 million. Twitter's advertising revenue was $226 million, about 80 percent of which came from mobile advertising.
Analysts polled by FactSet had expected an adjusted loss of 3 cents per share on revenue of $241.5 million. Twitter's own forecast in February was for revenue between $230 million and $240 million.
Shares of San Francisco-based Twitter fell $4.52, or 10.6 percent, to $38.10 in after-hours trading after the results came out. If it opens at this price on Wednesday, it will be the stock's lowest point since Twitter went public last fall. The stock had closed up $1.89, or 4.6 percent, at $42.62.
Twitter went public last November, setting a price of $26 per share for its stock, which then soared amid hungry investor demand. The high-flying stock peaked in December at $74.73 and then declined sharply.
Twitter had 255 million monthly users at the end of March, up 25 percent from a year ago. That's just about what Sterne Agee analyst Arvind Bhatia was expecting, though 2 million lower than Wall Street's consensus. The analyst called the quarter's results "mixed," noting that user metrics were better than they were in the final quarter of 2013 — Twitter's first as a public company — but not as strong as Wall Street had expected.
Continue reading this story on the...