Twitter reported a 28% increase in revenues in the first quarter of 2021 and profits were above analysts' expectations. However, Twitter's lower user growth and outlook for the second quarter disappointed investors, with analysts lowering the company's target share price.
Twitter (TWTR) shares fell after the company reported results for the first three months of the year.
Twitter's report came after its rivals: Facebook (FB), Pinterest (PINS) and Snap (SNAP) had already summed up their results, which were mixed. While Facebook shares reacted to the report by rising to new record highs, shares of Pinterest and Snap, despite the fairly good results, declined.
Twitter posted earnings per share of $0.16, beating analysts' expectations of $0.14.
Quarterly earnings rose to $68m, up from a loss of $8.4m a year ago.
Twitter's revenues, derived mainly from advertising, rose 28% year-on-year to $1.04 billion, above analysts' average forecasts of $1.03 billion.
Twitter said it added 7 million monetisable daily users during the first quarter the audience grew to 199 million, but this is below the 200 million expected by analysts.
The company said its customer base was up 20% year-on-year, while overall ad engagement was up 11% over the same period.
Forecast from Twitter
Twitter said it expects revenues in the current second quarter to be in the range of $980 million to $1.08 billion, with an average of $1.03 billion below Wall Street's expected $1.06 billion.
Commenting on the report, management said it was too early to assess the impact of Apple's iOS 14.5 privacy settings changes on Twitter's ad targeting.
Because of Twitter's lower user numbers and weaker second-quarter outlook, experts at four investment firms lowered their target prices for the company's stock, but maintained their ratings, seeing long-term potential for the company.