NEW YORK (Reuters) – Twitter Inc posted better-than-expected quarterly sales and a surprise increase in the monthly active users on Tuesday, sending shares up 13 percent to nine-month high as the campaign to clean up false and defamatory statements continued to attract advertisers.
FILE PHOTO: A 3D-printed logo of Twitter is seen in this photo illustration created in Zenica, Bosnia and Herzegovina on 26 January 2016. REUTERS/dado Ruvic/Image/File Photo
The microblogging site, the results of the attention of the AMERICAN President Donald Trump, a prolific tweeter with almost 60 million followers, which called for the creation of “more, more, and more honourable is” social media companies, repeating his claim that Twitter is biased against the Republicans, without the presentation of evidence.
Twitter’s monthly active users (MAU) grew by 9 million to 330 million euro in the first quarter from the previous quarter far better than Wall Street’s average estimate that it would lose 2.2 million users, according to the IBES data of Refinitiv.
“Twitter is on a path of sustainable growth and accelerated earnings expansion, driven by improvements to the user experience and tools enable direct response and search advertising,” said analyst Michael Pachter at Wedbush Securities.
It was Twitter the last quarter of the publication of MAUs. From now on it will only provide what it calls “monetizable” daily active users (mDAUs), that is designed to measure how many people are exposed to advertising on a daily basis, and the exclusion of people who tweet using text messages, or aggregate of sites such as TweetDeck.
For the first quarter, Twitter said mDAUs increased to 134 million, an increase of 12 percent compared to a year ago.
Analysts were encouraged by signs Twitter had turned a corner in the monthly user growth, but said that the new way of measuring the users could make comparisons between Twitter and rivals such as Facebook Inc. more difficult.
“People are not impressed with a composed metric and their unwillingness to give us actual users,” said Pachter. “I don’t think the stock can get out of its own way to clean them, and report the same data everyone else does.”
The company also forecast revenue for the second quarter largely below analyst estimates, and said it would have to continue to spend heavily on clean-up of Twitter and new ad products.
If larger rival Facebook, and Twitter under pressure over privacy concerns and the political influence of the activity on the service. Twitter has been working on the removal of thousands of spam and suspicious accounts, that they had the debt for consecutive declines in monthly active users in the past quarters.
Advertisers, which Twitter, with almost all of its revenue, have welcomed that move, but the company is still wrestling with the prospect of regulation in the United States and abroad, and accusations to the address of the clean-up amounts to censorship.
“The best ever happen to Twitter is Donald Trump,” Trump tweeted on Tuesday, after Twitter reported results, attributing the reaction to Fox Business Network host Maria Bartiromo. “So true, but they don’t treat me good as a Republican. Very discriminatory, difficult for people to register. Constantly taking people off the list. Major complaints of many people.”
Trump welcomed the involvement of the AMERICAN legislators who have called on technical managers to testify in Congress.
“No wonder the Congress wants to be involved – and they should. More and more companies to get out the WORD!” he tweeted.
The White House did not immediately respond to a request for comment.
“We maintain the Twitter Rules dispassionately and equally for all users, regardless of their background or political belief,” a Twitter representative said. “We are constantly working to improve our systems and will remain, transparent in our efforts.”
On a conference call after earnings, Chief Executive Jack Dorsey said Twitter was open for the regulation “when it makes sense” after an analyst pointed to Facebook recently to say it was admissible for governments to take a more active role.
“Regulations such as the GDPR is a net positive, not only for our service, but also for our wider industry in general,” he said, referring to Europe’s General data protection Regulation, which imposes stringent transparency about how companies can save and earn money with the user’s data.
Twitter has said on the observance of those rules, increases the company’s costs.
FORECAST LARGELY BELOW WALL ST
For the first quarter of 2019, Twitter’s revenue increased by 18 percent to $787 million from the year-ago quarter, topping Wall Street’s average estimate of $776.1 million.
Ad revenue jumped 18 percent to $679 million. In the United States, the advertising revenues increased by 26 percent, partly thanks to the video-ads.
But Twitter weather forecast current quarter revenue largely below Wall Street targets. The company expects revenue of between $770 million and $830 million, compared with $819.5 million estimated by analysts.
The total operating expenses (including the cost of sales increased by 18 percent compared to the first quarter a year ago. The company stressed that the operational costs increase by about 20% in 2019.
Twitter reported quarterly earnings of $191 million, or 25 cents per share, compared with $61 million, or 8 cents per share, a year earlier. With the exception of a $124.4 million tax benefit, the company earned 9 cents per share.
Reporting by Angela Moon; Writing by Meredith Mazzilli; Editing by Lisa Shumaker, Bernard Orr