Twitter Posts Loss On Expenses, Yet Tops Estimate; Stock Down

(RTTNews) - Micro-blogging site Twitter Inc (TWTR), Tuesday reported a first-quarter loss that widened from last year, hurt by stock-based compensation expense while revenue surged on growth in advertising business. However, results for the quarter topped Wall Street estimates.

Twitter provided some strong revenue outlook for the second quarter and lifted its expectations for 2014. Nonetheless, investors were not impressed, dragging down Twitter shares by about 10 percent in after-hours trade on the New York Stock Exchange.

Twitter, which had a scintillating IPO in November, said its monthly active users (MAUs) for the quarter grew 25 percent year-over-year to 255 million. Compared with the sequential fourth quarter, MAUs grew about 6 percent.

Mobile MAUs for the quarter jumped 31 percent year-over-year and represented 78 percent of total MAUs.

Twitter, based in San Francisco, California, posted a first-quarter net loss of $132.4 million or $0.23 per share, compared with a loss of $27 million or $0.21 per share a year ago.

Results for the recent quarter included $126 million of stock-compensation expense.

Excluding items, adjusted earnings for the quarter were $183 thousand or breakeven per share, compared with a loss of $10.5 million or $0.08 per share a year ago.

On average, 30 analysts polled by Thomson Reuters expected a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter surged to $250.5 million from $114.3 million in the prior year. Thirty analysts had a consensus revenue estimate of $241. million for the quarter.

Twitter's business hinges on advertisements posted on its site alongside the tweets through smartphones and other mobile devices. The company has been under pressure to become a mainstream player and is striving to expand its user base, which is a key metric for such companies.

Investors will be seeing if Twitter can emulate the stupendous user-base growth at Facebook (FB) and other social media sites, and benefit from grabbing a bigger slice of the advertising business.

During the quarter, Twitter continued to improve its experience for users by enhancing push notifications, reducing the number of steps in the sign-up process for Android users, and improved tools for advertisers. The company earlier redesigned its mobile apps and websites.

For the second quarter, Twitter expects revenues of $270 million to $280 million, while analysts currently expect $272.94 million.

The company expects stock-based compensation expense of $170 million to $180 million for the quarter.

For fiscal 2014, Twitter now expect revenues of $1.20 billion to $1.25 billion, up from prior guidance of $1.15 billion to $1.20 billion. Analysts currently expect revenues of $1.24 billion.

About mid-April, Twitter agreed to acquire social data provider and its long-standing partner Gnip, in a bid to better analyze data.

Twitter was founded in March 2006 by Jack Dorsey, Evan Williams and Biz Stone. The service lets users post text-based messages of up to 140 characters, known as tweets.

In its November IPO, Twitter set a price of $26 per share and the stock soared on its first trading day on November 8, closing at $44.90, up more than 70 percent.

On Tuesday, the stock closed at $42.62, up $1.89 or 4.64%, on a volume of 19 million shares. In after hours, the stock dropped $4.18 or 9.81% at $38.44.