The Twitter (NYSE: TWTR) Update – Not-so-good Third Quarter Results


As the third quarter of the current financial year comes to an end, Twitter (NYSE:TWTR); even though performed slightly higher than the consensus of $361 million, still didn’t produce impressive results. It’s Earnings per Share was $0.01, and it made $361 million in revenue. The company is aiming for a $440 million to $450 million in revenue for the fourth quarter. This is in line with the consensus estimate of $448.18 million. Twitter (NYSE: TWTR) has its hopes set at $1.36 billion to $1.37 billion in revenue for 2014, and consensus predictions indicate a $1.36 billion.

Twitter (NYSE:TWTR)’s monthly active users were a total of 284 million for the third quarter, which is a 23% hike from last year’s third quarter. 80% of these are mobile user. This total is actually a drop from previous quarters. In the second quarter the users figure fell by 6.3% and then a further 4.8% in the third quarter. Even though the 284 million users do fall under the analysts’ predictions, it is still at the lower end of the prediction.

The third quarter showed a 14% increase from last year, in timeline views and an 83% increase from advertising revenue.

Twitter (NYSE:TWTR)’s total revenue were a sum of:

–          $320 million of advertising revenue, of which 85% is solely mobile advertising.

–          All other revenues were from data licensing of $41 million, 171% increase from last year

–          Lastly, international revenues rounded up to $121 million making up 34% of the total revenue. This is a 176% increase over last year.

Twitter (NYSE:TWTR) also managed to get itself a position among the 20 brand loyalty leaders, the only contender that wasn’t a tech company. This list was concluded after evaluating 65 product categories and 721 brands.

According to Twitter (NYSE:TWTR) CEO, Dick Costolo; Twitter (NYSE:TWTR) has another strong financial quarter building up. He believes that the company could manage to attract a large audience throughout the world, and it could make its core services stronger and more appealing. This would mean, cutting down obstacles that stand in the way of consumption, as well as work on and produce new apps and services for its users.

On October 2, JP Morgan (NYSE:JPM) evaluated Twitter (NYSE:TWTR) and predicted a $64 price target, expecting new user to sign up for Twitter (NYSE:TWTR), and an impressive shift in its mobile advertising sector. But by October 21, Citigroup (NYSE:C) evaluated Twitter (NYSE:TWTR)’s position and estimated a $53 price target. Whereas, in reality the shares of Twitter (NYSE:TWTR) closed on 2.7% less at $48.56 on Monday. The market was left in shock which further contributed to shares going down another 9% to $44.12.

The stock consensus set by analysts now is of $54.82 price target, with post-IPO trading finishing from $29.51 to $74.73. At this stage Twitter (NYSE:TWTR)’s market cap is $29 billion. The next quarter in already underway and Twitter (NYSE:TWTR)’s fate will be revealed soon.