Twitter Shares Fall, Despite Q3 Numbers Hitting Wall Street Expectations

Twitter Shares Fall, Despite Q3 Numbers

Twitter reported that average monthly active users on the social-media service increased by about 13 million during the third quarter of 2014, to stand at 284 million worldwide — an increase of 23% year-over-year — and met financial analysts’ targets.

But investors were unimpressed. Twitter’s stock fell on the earnings report, dropping more than 9% in after-hours trading following its earnings announcement.

The company reported Q3 2014 revenue of $361 million, beating Wall Street consensus estimates of $351 million. For Q3 2014, Twitter’s net loss was $175 million (an adjusted EPS profit of 1 cent per share, in line with expectations), compared with a net loss of $65 million in the same period last year (an adjusted EPS loss of 13 cents per share).

“We had another very strong financial quarter,” Twitter CEO Dick Costolo said in announcing the results. “I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”

As of the end of Q2, Twitter had 271 million monthly active users, gaining a net 16 million unique monthly active users and topping Wall Street earnings estimates.

In terms of total reach, Twitter trails chief rival Facebook, which had 1.32 billion monthly active users worldwide (up 14% year-over-year) at the end of Q2. Facebook is slated to report third-quarter earnings Tuesday after market close.

For Q4, Twitter said it projects revenue to be $440 million to $450 million (again, in line with analyst estimates). Adjusted earnings before interest, tax, depreciation and amortization will be in the range of $100 million to $105 million for the fourth quarter, according to the company.

Twitter had about 3,600 employees at the end of the third quarter, up sequentially from 3,300 as of the end of Q2, CFO Anthony Noto said on the company’s earnings call.

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