Twitter post solid Q1 results but outlook sinks stock

BUSINESS

Twitter post solid Q1 results but outlook sinks stock

Barbara Ortutay

Published Thursday, April 29, 2021 4:41PM EDT Last Updated Thursday, April 29, 2021 5:36PM EDT

This July 9, 2019, file photo shows a sign outside of the Twitter office building in San Francisco. (AP Photo/Jeff Chiu)

Text:

Like its bigger tech peers, Twitter posted stronger-than-expected results for the first quarter on Thursday. But its lukewarm outlook sent shares tumbling after hours.

The San Francisco-based company earned $68 million, or 8 cents per share, in the January-March period. That's up from a loss of $8.4 million, or 1 cent per share, a year earlier.

Revenue grew 28% to $1.04 billion. Analysts, on average, were expecting a loss of 2 cents per share on revenue of $1.03 billion, according to a poll by FactSet.

In a tumultuous start to the year, Twitter permanently suspended its arguably most powerful and polarizing user - former President Donald Trump - from its platform in January after the deadly riots at the U.S. Capitol.

It had also suspended more than 150,000 other accounts across its platform for what it described as 鈥減ropagating a conspiracy theory鈥� linked to dangerous behaviour offline. Primarily these accounts were linked to QAnon, the unfounded conspiracy theory that claims Trump is waging a secret battle against the 鈥渄eep state鈥� and a sect of powerful devil-worshipping pedophiles.

While the suspensions irked certain users, Twitter executives insist they want a 鈥渉ealthy conversation鈥� on the platform and are willing to take some heat for enforcing rules.

鈥淲hen it comes to the Twitter Rules, we recognize that politicians and government officials are constantly evolving how they use the service, and we want our policies to remain relevant to the everchanging nature of political discourse on Twitter,鈥� the company said in a statement Thursday. To this end, Twitter is seeking public input on its rules.

Twitter had 199 million daily users, on average, in the third quarter, up 20% year-over-year and slightly below the 200 million that analysts were expecting.

By comparison, Facebook had 1.88 billion daily users on average in March 2021, an increase of 8% year-over-year. Snapchat, meanwhile, had 280 million average daily active users in the first quarter.

Twitter does not disclose monthly user figures.

Twitter said it expects revenue between $980 million and $1.08 billion for the second quarter. The midpoint of that is below analysts' expectations of $1.06 billion.

Twitter's stock fell $6.21, or 9.5%, to $58.88 in after-hours trading.

Correction:

This story has been corrected to use a comparable FactSet estimate of a two cent per share loss, according to generally accepted accounting principles.