Published: Fri, July 28, 2017
Markets | By Terence Owen

Twitter Inc 2Q 2017 Earnings Killed by MAUs Again

Twitter Inc 2Q 2017 Earnings Killed by MAUs Again

One of the key items I was hoping to get more insight into when Twitter reported its second-quarter results was management's expectations for revenue going forward.

Net losses widened to $116 million from $107 million a year earlier, the report said.

The company has been trying to boost revenue through livestreaming deals, but had a setback in April when it lost a deal to stream U.S. National Football League games this year to Amazon.

While Twitter's monthly active users (MAUs) grew 5 percent from 2016's Q2 to 2017's comparable quarter, that all-important statistic was flat from this year's initial three-month measurement period.

Under the prior method, non-GAAP net income for the quarter would have been $87 million and non-GAAP diluted EPS would have been $0.12.

Revenue: $574 million vs. $536.7 million expected, according to Thomson Reuters. This has somewhat renewed interest in the stock.

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For the three months, around 2 million Americans stopped using the social networking site, though those losses were offset by gains in global users.

Twitter's stock value crashed on Thursday following the revelation that user growth had stagnated, however, falling 14% at the time of this writing. Monthly active Facebook users of 2.01 billion met the consensus estimate and was also up 17%. Twitter's ad revenue fell 8% year over year to $489 million. Also, revenue growth rate is decelerating.

Despite that, If Dorsey et al had delivered a beat accompanied by sustained user growth it would be a positive, but that was far from the case.

At the time of writing, the company's share price is down 11%. This quarter, the very Twitter move of its users not growing and its advertising business stalling happened once again and shed more doubt on the company's future. But all these are yet to move the needle for Twitter.

It is in stiff competition for advertising dollars with other platforms like larger rival Facebook Inc FB.O and Snap Inc's SNAP.N messaging app Snapchat. As I mentioned, we're very excited about the third consecutive quarter, double-digit DAU growth at 12% year-over-year.

That's the best way to describe Twitter's current status when it comes to adding new users. Yesterday's science-fiction is becoming today's reality. Most importantly, it reveals 4 stocks with massive profit potential.

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