The Strategist

Twitter ends the quarter in the black

02/09/2018 - 03:58

Twitter Inc. on Thursday reported on quarterly net profit for the first time ever. At that, the company's results exceeded Wall Street forecasts amid rising sales of video advertising, while the fight against fake accounts led to the fact that the number of users of the social network did not meet expectations, reports Reuters.

The company reported in October that it could for the first time make a profit as a result of cost reduction. Adjusted earnings and earnings in the fourth quarter surpassed analysts' forecasts. Twitter reported that it expects to "profit on GAAP for the entire 2018 year."

At the same time, the number of monthly active users of Twitter amounted to 330 million in the fourth quarter, an increase of 4% compared to a year earlier, but remained unchanged from the third quarter. Analysts on average expected that the number of users would be 332.5 million, according to data of the analytical firm FactSet.

The company said that the growth in the number of users was limited by the seasonal factor and changes made in Safari browser from Apple Inc, as a result of which the number of users was reduced by 2 million. Twitter has warned investors about these factors in October.

The number of monthly active Twitter users in the US market, where Twitter receives the bulk of its revenues, has dropped to 68 million from 69 million in the third quarter.

Twitter received a net profit of $ 91.1 million, or 12 cents per share, in the fourth quarter compared to a loss of $ 167.1 million, or 23 cents per share, a year earlier. Adjusted earnings were 19 cents per share, exceeding the averaged forecast of analysts interviewed by Reuters at 14 cents per share.

Revenue rose 2% year-on-year to $ 731.6 million, showing the first gain since the fourth quarter of 2016 and surpassing Wall Street's consensus forecast of $ 686.1 million.

Twitter continues to diversify sales, going beyond advertising. The company increased revenue from licensing data and other services by 10% to $ 87 million compared to a year earlier. Revenue from advertising grew by 1% to $ 644 million.