Twitter shares rise on ad-partnership news, ahead of this week’s earnings

Twitter shares are trading about 6 percent higher today after the company announced new ad partnerships, and ahead of its earnings report Thursday.

Twitter announced today it would sell ads outside of Twitter, with Promoted Tweets set to appear on Yahoo Japan and on news-reading app Flipboard. The expected additional revenue stream could help appease investors who have been worried about Twitter’s growth.

The San Francisco company’s announcement comes amid increasing questions about the future of Twitter, and of its CEO, Dick Costolo. Last week, Twitter Chairman Jack Dorsey unleashed a tweetstorm extolling Twitter’s virtues, and voiced support for Costolo as well.

Why the cheerleading for Costolo? There have been reports that activist shareholders may go after him because of concerns about user growth and that the company isn’t moving quickly enough to roll out new offerings.

As for earnings expectations, analysts on average expect the company to have earned 6 cents per share on revenue of $453 million. In the fourth quarter of 2013, the company earned 2 cents per share on $243 million in sales. For the full year, analysts expect Twitter will report $1.38 billion in revenue, compared with $665 million in revenue in 2013.

Analysts and investors will also be watching for user growth in the fourth quarter. In the third quarter, Twitter reported that it added 13 million monthly active users, boosting its total to 284 million users.

Twitter shares are up about 6 percent to $40 as of this post. That is about 40 percent lower than the shares’ 52-week high of $67.24, reached in February 2014.


Photo from Bay Area News Group archives


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