CFO
Menu
  • Accounting & Tax
  • Banking & Capital Markets
  • Growth Companies
  • Human Capital & Careers
  • Risk & Compliance
  • Strategy
  • Technology
  • Sign InSign Up
CFO
  • Conferences
  • Webcasts
  • Research
  • White Papers
  • Jobs
  • Training
  • Newsletters
  • Magazine
CFO
Technology to Alter Finance’s Business Partner Role
Intelligent automation and advanced analytics mean…
Metric of the Month: Establishing the Daily Cash Position
Establishing a daily cash position can be a…
Female Pay Discount Doesn’t Go to the Very Top
At large companies, male CFOs tend to earn more…
  • Accounting & Tax
  • Banking & Capital Markets
  • Risk & Compliance
  • Human Capital & Careers
  • Growth Companies
  • Strategy
  • Technology
Financial Performance

No ‘Trump Bump’ for Twitter in 4th Quarter

"There isn't a growth story here," an analyst says. "They have to convince advertisers they will reach an expanding audience.”

Matthew Heller
February 9, 2017 | CFO.com | US
share
Tweet
Print

Email this article

Twitter shares tumbled more than 12% on Thursday after the social media platform’s fourth-quarter results suggested it is struggling to convert growing usage into revenue growth.

While the number of daily Twitter users rose 11% year over year, revenue increased just 1% to $717.2 million — the slowest revenue growth since Twitter went public four years ago. Advertising revenue totaled $638 million, down from $641 million a year earlier.

Recommended Stories:
  • Molson Coors Restates Tax Liabilities by $247M
  • Pricey Pickups Power GM Earnings in Q4
  • Disney Box-Office Weak But Earnings Beat Estimates

Twitter also posted fourth-quarter earnings of 16 cents per share. Analysts had expected earnings of 12 cents per share on much higher revenue of $740.1 million, according to a consensus estimate from Thomson Reuters.

In trading Thursday, Twitter shares fell 12.3% to $16.41. “The fourth quarter capped a turbulent year for the social-media service, which faced a botched potential acquisition, growing criticism over lax abuse policies and the departure of more than a dozen top executives, including its chief operating and technology officers,” The Wall Street Journal said.

CEO Jack Dorsey stressed that daily active usage accelerated for a third consecutive quarter and “we see this strong growth continuing.”

“While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service,” he said in a news release. “This will take time, but we’re moving fast to show results.”

Among other things, Twitter has made a big bet on live streaming and is hoping to capitalize on the awareness generated by President Donald Trump’s prolific tweeting. But it still expects advertising revenue growth to lag behind user growth this year.

“There isn’t a growth story here,” Michael Pachter, a Wedbush Securities analyst, told Reuters. “They have to convince advertisers that they will reach an expanding audience.”

The WSJ warned that Twitter’s efforts to boost advertising revenue “could clash with the stiffer competition for advertising that Twitter said it expects this year. Twitter’s biggest competitor, Facebook Inc., is widening its lead, and it faces a rival coming up from behind: Snap Inc., expected to go public this year.”

Post navigation

← Special Report: Preventing Cybersecurity Losses
Court Blocks Another Healthcare Megamerger →

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

Popular Articles

  1. Mismatch: Finance Roles’ Importance vs. Performance
  2. SEC Accuses Four Firms of ICFR Deficiencies
  3. Tesla CFO Ahuja’s Retirement Stuns Wall St
  4. DHS Announces Changes To H-1B System
  5. ASC 606: Trips, Traps, and Troubleshooting
Advertisement
 

Topics

  • Accounting & Tax
  • Banking & Capital Markets
  • Human Capital & Careers
  • Growth Companies
  • Risk & Compliance
  • Strategy
  • Technology

Media

  • Videos
  • Whitepapers
  • Research
  • Magazine

Events

  • Conferences
  • Argyle Events
  • Webcasts

Services

  • Reprints
  • Back Issues
  • Mobile
  • Widgets
  • RSS

About CFO

  • About CFO
  • Editorial Staff
  • Press
  • Advertise
  • Contact Us

Want the Magazine?

Relax and unplug with our award-winning coverage.

Subscribe Now
Follow Us