Twitter (NYSE:TWTR) was one of Thursday’s notable stocks in decline. The pullback was in reaction to the company’s latest earnings report which prompted its shares to plunge as much as 12.40% after the social network missed 4Q16 revenue expectations and issued below-consensus guidance.
In its quarterly report, Twitter said it earned $0.16 per share, well above the $0.12 per share analysts were expecting. Revenue rose just 1% year over year (y/y) to $717 million, below Street views for $739 million. U.S. revenue totaled $440 million, a decline of 5% y/y. Furthermore, the company reported a net loss of $167 million, or $0.23 per share, from a net loss of $90.24 million, or $0.13 per share, in the year-ago period. Non-GAAP net income came in at $119 million while GAAP loss from operations for Q4 printed at $144 million as compared to $67 million for same period last year.
User growth was also unimpressive, with monthly active users increasing just 0.63% to 319 million from 317 million in the previous quarter.
Twitter didn’t provide much optimism for fiscal 2017, as no explicit revenue forecast was given. The company also said it expects advertising revenue growth, which in Q4 totaled $638 million, down slightly y/y, to continue to lag that of audience growth throughout the year. It noted: “Advertising revenue growth may be further impacted by escalating competition for digital ad spending and the re evaluation of our revenue product feature portfolio, which could result in the de-emphasis of certain product features.”
Picking through the results, Morgan Stanley’s Brian Nowak wrote ina note to investors that greater ad revenue declines are implied through Twitter’s offered guidance. The analyst calculates 12% y/y and 15% y/y decreases in the segment for 1Q17 and full fiscal year 2017, respectively. Meanwhile, the stock has received at least one downgrade, from Cowen & Co. The firm cut their TWTR rating to ‘Underperform’ from ‘Market Perform’, and slashed the name’s price target by 3 points to $12 a share.
Twitter Stock Action
Twitter stock continues to vacillate near its multi-month trading range bottom. The issue, which extended as high as $18.72 on Feb. 8, hit a new intraday low of $16.26 in recent trade.
The equity looks potentially poised to see more downside and possibly re-test in the near term its 52-week low of $13.73.
Twitter’s decline began in early January 2014 and has been a fairly steady nosedive since that time resulting in the name losing nearly 80% of its value.
The $12 billion market company has a negative T-12 profit margin of 15.06%. EPS registers at ($0.55).