Twitter is surging ahead of earnings

Shares of Twitter are surging, up 4.75% at $US26.44 apiece, ahead of the company’s fourth-quarter earnings, which are scheduled to be released ahead of Thursday’s opening bell. Investors are anxious to see whether the company’s better-than-expected third-quarter results will be part of a turnaround for the embattled company or a one-off event.

Here are the key figures to watch in Twitter’s earnings report, according to Bloomberg data:

  • Adjusted earnings per share: $US0.14
  • Revenue: $US686.4 million
  • Net income: $US102.35 million
  • Monthly Active Users: 2 million (Wall Street estimate cited by RBC)

Last quarter, the company said that it had overstated its monthly active users since late 2014 because it included users from a third-party, text-based app related to Fabric, its now-shuttered developer platform. Still, the company reported that it added 4 million monthly users and grew its daily users by 15% compared to the previous quarter.

Its monthly user growth will be a key focus for investors this quarter, said RBC Analyst Mark Mahaney.

Twitter has had trouble attracting new users to its platform. It was the second least popular service among all the big social media apps, behind Snapchat, an RBC consumer survey found. Twitter also had the lowest customer satisfaction levels compared to other social media platforms, the survey revealed.

Mahaney believes that investors also need to watch out for revenue growth trends, especially in advertising. “Advertising is certainly Twitter’s most important revenue line (it is ~86% of total revenue),” he wrote.

Mahaney expects Twitter to beat its forward guidance revenue of $US629 million to $US667 million, as the company has exceeded expectations for that metric in 10 of the last 14 quarters.

Investors will also keep an eye on how Twitter’s upper management handles the investor earnings call after its chief operating officer, Anthony Noto, left the company for lending startup SoFi last month. Twitter has opted not to replace him, instead transferring his responsibilities to other members of its leadership team. Twitter has been mired by a wave of key executive turnovers in the past couple of years.

Twitter shares are up 8.02% for the year.

Read more about how Twitter’s stock performed after rumours of a proposed Salesforce takeover.

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