Twitter losses despite an expected "Trump bump" from the tweeting commander-in-chief have analysts all aflutter after advertising revenue estimates for the fourth quarter were way off.
Shares in the social media company tumbled 11 percent to $16.67 on Thursday morning after falling that much in pre-market trading, reported Forbes magazine. Twitter's revenue growth fell again for the 10th straight quarter to $717 million, an increase of one percent over the same period last year.
Analysts polled by Yahoo Finance had predicted the microblogging platform's revenue would grow to $740 million over the period. The company reported a net loss of $167 million, or 23 cents a share, compared to a loss of $90 million the year before.
"As previously stated, we expect advertising revenue growth to continue to lag that of audience growth in 2017," said the outlook statement in Twitter's fourth quarter report. "Advertising revenue growth may be further impacted by escalating competition for digital ad spending and the reevaluation of our revenue product feature portfolio, which could result in the de-emphasis of certain product features."
Twitter's chief executive Jack Dorsey asked for patience, telling analysts on a conference call Thursday that Twitter was making investments in machine learning and searching for new ways to invigorate ad sales, reported Reuters.
"It will take time to show the results we all want to see, and we're moving forward aggressively," Dorsey said. "The whole world is watching Twitter."
Twitter's quarterly revenue growth was the slowest since the company went public in 2013.
"There isn't a growth story here," Michael Pachter, a Wedbush Securities analyst, told Reuters. "They have to convince advertisers that they will reach an expanding audience."
Twitter, the favorite communication tool for President Donald Trump, has not created a "Trump bump" for the microblogger. Last month, the global financial service company UBS downgraded Twitter from buy to neutral over concerns about advertisers' dwindling interest in it, reported CNBC then.
"We believe Twitter's ad revenue will likely be pressured (and grow below industry levels of mid-teens CAGR [compound annual growth rate] the next three years) given lackluster advertiser demand (among heightened competition), executive turnovers and challenged ad execution," equity analyst Eric Sheridan said in a research note, noted CNBC in January.
© 2025 Newsmax. All rights reserved.