Shares slump after Twitter cuts revenue forecast

Twitter Inc cut its full-year revenue forecast due to weak demand for its direct response products, sending its shares down as much as 24 per cent yesterday.

Twitter said it expected 2015 revenue of $2.17 billion to $2.27 billion, compared with an earlier forecast of $2.3 billion to $2.35 billion. Analysts on average had been expecting full-year revenue of $2.37 billion.

The company’s direct response products are tweets that businesses can send to targeted users, which can include a clickable business card or a link to drive traffic to the advertiser’s website.

Twitter, which allows users to broadcast 140-character messages, said revenue rose to $436 million in the first quarter from $250.5 million a year earlier. This was below the average analyst expectation of $456.8 million.

The company’s monthly active users rose 18 per cent to 302 million, in line with analysts’ expectations of slowing growth.

Twitter’s net loss widened to $162.4 million, or 25 cents per share, for the first quarter to March 31st from $132.4 million, or 23 cents per share.

Excluding items, the company earned 7 cents per share.

Analysts on average had expected Twitter to earn 4 cents per share, according to Thomson Reuters estimate system.

Twitter shares were halted briefly yesterday after market data firm Selerity revealed the earnings numbers before Twitter released its statement. – (Reuters)