Twitter Lays a Goose Egg in Second Quarter and Shares Are Tanking

Twitter shares drop 9 percent as it fails to deliver user growth

Twitter beats Wall Street expectations, but user growth has totally stagnated

A long-term turnaround depends on Twitter expanding its audience.

The San Francisco, California-based social media giant reported 328 million monthly active users in Q2 2017, the same figure that it attached to its report for the previous quarter. Revenue fell 4.7% and the company's net loss also widened, affected by a $55 million writedown of the value of its investment in SoundCloud, the German music streaming service.

Amid fierce competition from Facebook and Snapchat, Twitter's average monthly active users (MAU) was 328 million in the three months through June 30. Company fiscal year is ending in December and analysts' consensus recommendation is Buy for FOLD and estimated EPS for next quarter is $ -0.35.

Here are some other highlights from management's letter to shareholders.

"We don't have data that will explain a causal impact" of that shift, he said on a conference call.

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Twitter has heavily invested in video and live content, in a bid to attract more mainstream users and premium advertising deals. "It always was and always will be". Daily active users increased 12% year-over-year, compared with an increase of 14% last quarter. For the second quarter, Twitter's sales fell 5.5 percent to $574 million. Following the release of the earnings report, the stock was down almost 10% at $17.73 in early trading indications Thursday. According to the past 12 months report, the income was nearly $-438.70M and sales remained $2.48B.

There was an air of positivity in the buildup to Twitter's second quarter earnings today, with the company's share price popping in the wake of its last earnings results in April. Twitter expects adjusted EBITDA to be between $130 million and $150 million for the third quarter and expects total non-GAAP expenses to fall 3% to 6% compared to 2016. Analysts' estimates typically exclude special items.

Twitter's business troubles contrast with its increased profile in the political world, as President Donald Trump frequently uses the platform to reach the public in an unfiltered manner. Twitter, now trading 3.60% above its 20-day and 13.69% versus the 200-day simple moving averages while 7.10% compared with its 50-day simple moving average.

Digging down into the details, however, reveals Twitter's MAUs actually declined in its native USA market in Q2.

P/E of the company is not reported.

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