Twitter stock falls 10% on weak sales

Twitter Inc (NYSE:TWTR) posted a GAAP loss of 15 cents per share, compared to the year-ago quarter's GAAP loss of 21 cents per share.

In its forward-looking statements for the third fiscal quarter of 2016, Twitter says it expects revenue of about $590 million to $610 million, which is far lower than the $678 million analyst had expected Twitter to forecast. It reported earnings per share minus items of 13 cents, beating the consensus of 10 cents.

On safety, the site added: "We, along with the broader industry, have a lot more work to do in this area, but we're committed to continuing to develop tools that will help keep Twitter, Periscope and Vine safe and open for people to connect in real time".

The company detailed a weak revenue outlook for the third quarter, sending its shares down a near 10 percent in the after-hours trading.

Revenues for the quarter grew 20 percent to $601.96 million from $502.38 million previous year.

The social network reported sales of $602 million for the quarter, falling short of Wall Street estimates of $608 million, according to analysts surveyed by FactSet.

Growth at the San Francisco-based social messaging operation, which saw gains of about 9.8 percent in 2015, will bring the site's total population to about 370 million global users by 2020, eMarketer predicts, though these gains are expected to begin tapering off after this year.

Advertising revenue rose 18 percent to $535 million, with mobile advertising revenue contributing 89 percent of total advertising revenue. CEO Jack Dorsey is now entering his second year at the helm trying to turn Twitter into a destination new users might enjoy visiting and advertisers might spend on. Analysts were looking for $681.4 million. "This is reflected in both our Q2 performance and Q3 outlook", said the company in a letter to shareholders.

  • Wendy Palmer