Twitter share price jumps then plunges back down on first quarter numbers

 
Caitlin Morrison
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Social Networking And Blogging Website Twitter
The social network missed revenue estimates but grew user numbers (Source: Getty)

Twitter’s shares initially jumped in after hours trading last night, before nosediving 11 per cent below their closing price, after the firm missed revenue estimates and cut its forecast for the second quarter.

The social network increased revenue by 36 per cent compared to the same period of last year, to $595m (£408m) from $436m. Revenue came in at the lower end of the guidance range, Twitter said, "because brand marketers did not increase spend as quickly as expected in the first quarter".

In the second quarter, Twitter is expecting revenue to be in the range of $590m-$610m, which falls well short of a $677.6m consensus.

The firm beat expectations on earnings per share (EPS) of $0.15, by $0.05, up from $0.12 in the first period of last year.

Meanwhile, average monthly active users (MAU) grew by three per cent year-on-year to 310m - also up on the 305m MAUs recorded in the final quarter of 2015.

The company said this return to sequential growth in usage was "driven by seasonality and marketing initiatives".

"We also saw deepening engagement (likes, replies and retweets) driven by a few important product launches, including the enhancements to the timeline and the Twitter-Periscope integration," the firm added.

The group narrowed its quarterly net loss to $80m, from $162m in the first quarter of last year.

Twitter has had a bumpy ride over recent months. Results for the fourth quarter, released in January, showed that user numbers were stalling, pushing the stock down by ten per cent - and in February Twitter's share price plumbed new depths, falling to an all-time low of $13.91.

News that the social media group had struck a deal with the NFL for the digital rights to stream American football matches gave the company's stock a boost earlier this month.

However it was subsequently knocked after analysts at Morgan Stanley cut price targets and earning forecasts, stating that "engagement and new user trends remain troubling".

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