Twitter Loss Narrows, But Stock Down 10% On Weak Outlook

(RTTNews) - Micro-blogging site Twitter Inc. (TWTR), Tuesday reported a smaller loss for the second quarter, as revenues climbed 20 percent reflecting growth in its advertising business despite a continued poor growth in number of users. Adjusted earnings for the quarter trumped Wall Street expectations, while revenues fell short of estimates.

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

Twitter's second-quarter loss narrowed to $107.2 million or $0.15 per share from $136.7 million or $0.21 per share last year.

On an adjusted basis, earnings for the quarter were $92.9 million or $0.13 per share, up from $48.5 million or $0.07 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.10 per share for the quarter.

Revenues for the quarter grew 20 percent to $601.96 million from $502.38 million last year. Analysts had a consensus revenue estimate of $606.77 million for the quarter.

Advertising revenue rose 18 percent to $535 million, with mobile advertising revenue contributing 89 percent of total advertising revenue. Data licensing and other revenue surged 35 percent to $67 million from a year ago.

The investors are worried about the social media company's weak performance reflected by its sluggish user growth and the amount of time each user spends on the networking site. The social networking site is struggling to attract new users as it used to.

Twitter said monthly active users were 313 million in the second quarter, up just 3 percent from last year. Mobile monthly active users represented 82 percent of total users.

Looking forward to the third quarter, Twitter expects revenues of $590 million to $610 million. Analyst polled by Thomson Reuters currently expect revenues of $678.18 million.

"We're seeing a continuation of the trends discussed last quarter with less overall advertiser demand than expected. This is reflected in both our Q2 performance and Q3 outlook," said the company in a letter to shareholders.

TWTR closed Tuesday's trading at $18.45, down $0.20 or 1.07%, on the Nasdaq. The stock further dropped $1.81 or 9.81% in the after-hours trading.