Subscribe free to our newsletters via your
. 24/7 Space News .

Twitter faces critical earnings test
by Staff Writers
New York (AFP) Feb 05, 2014

Twitter releases its first earnings report since a wildly successful stock offering on Wednesday, in what is being seen as a critical test for the popular messaging platform.

Shares in Twitter have soared from the offering price last November of $26, and analysts say that to sustain that momentum Twitter must prove it can grow and move toward profitability.

Twitter shares rose 1.6 percent to $66.32, their highest level since December.

Because Twitter has never delivered a profit, analyzing its value is a tricky task.

Wall Street expects Twitter to report continuing losses in the fourth quarter. But analysts will be scrutinizing the results for gains in advertising revenues, Twitter's user base and other metrics that measure "engagement," or how people use the platform.

Mark Mahaney at RBC Capital Markets remains upbeat with an "outperform" rating on Twitter.

"We remain positive on Twitter's ability to become one of the Web's leading utilities (alongside Google, Amazon, Facebook)," he wrote in a note to clients.

"Twitter has displayed very robust growth in key metrics, and we have confidence that this momentum can continue as the company develops its advertising platform... we remain enthusiastic about the company's long-term opportunity."

Twitter has fast become engrained in popular culture but must still convince investors of its business model, having lost more than $440 million since 2010.

With 232 million users and growing, Twitter is expected to be able to reach profitability over time by delivering ads in the form of promoted tweets, and from its data analytics. The research firm eMarketer estimates Twitter will bring in nearly $1 billion in 2014 in ad revenues.

But analysts at Cantor Fitzgerald recommend "sell" for Twitter saying its valuation is "excessive," seeing "more downside than upside short-term."

The Cantor Fitzgerald analysts said even with strong advertising and other gains, Twitter could face pressure because more shares will come on the market after the "lock-up" expiration that prevented insider sales so far.

Arvind Bhatia at Sterne Agree says in a note to clients that Twitter is likely to show gains in users, revenue and engagement but that he remains "neutral" on the stock.

"We continue to like the Twitter platform and believe in the company's long-term prospects," he said. "However, we remain neutral given the stock's significant premium to its high-growth peers."

Morgan Stanley's Scott Devitt, who rates Twitter as "underperform," said investors should carefully listen to management's plans.

"We look for management commentary to focus on providing insight related to Twitter's user growth and engagement, while discussing new product developments that could drive future revenue initiatives, especially in targeting offline TV ad dollars," he said.

A more mainstream Twitter?

Devitt said Twitter must address issues of advertising, especially on mobile, and that he wants to know "How does Twitter plan to accelerate user growth and make Twitter more mainstream?"

Paul Ausick at 24/7 Wall Street said Twitter may be riding the coattails of Facebook, which posted strong results last week and buoyed the social media sector.

"Without Facebook's big earnings report last week, it is probably fair to say that Twitter stock would be trading at about seven percent below where it is trading today," Ausick said in a blog post.

"Should Twitter fail to meet estimates on Wednesday, company management could have a lot of explaining to do."


Related Links
Satellite-based Internet technologies

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Obama hooks up new school broadband plan
Adelphi, United States (AFP) Feb 04, 2014
President Barack Obama on Tuesday unveiled a new government partnership with the private sector worth nearly three billion dollars to hook up an extra 20 million school kids to high speed Internet. "In a country where we expect free Wifi with our coffee we should definitely demand it in our schools," Obama said, unveiling the latest prong of his "opportunity agenda" in a Washington suburb. ... read more

NASA Extends Moon Exploring Satellite Mission

NASA's LRO Snaps a Picture of NASA's LADEE Spacecraft

Sole camera from NASA moon missions to be auctioned

New results on the geologic characteristics of the Chang'e-3 exploration region

MAVEN on Track to Carry Out its Science Mission

NASA Mars Orbiter Examines Dramatic New Crater

Russia proposes water-hunting instrument for future Mars rover

Work on Mystery Rock Continues As Rover Marks 10

New scientific field looks at the big picture

Future interplanetary spacecraft to be equipped with 'plantations'

Russian Space Farmers Harvest Wheat, Peas and Greens

FAA Grants Waypoint 2 Space Safety Approval Of Training Programs

Moon plays trick on Jade Rabbit

Waiting for Yutu

'Goodnight, humans': Says Yutu As The Sun Sets

Extra Time for Tiangong

NASA Selects Physical Science Research Proposals for the ISS

Russian Cargo Craft Departure Clears Way for Next Delivery

NASA Extends Reliance on Russian Spacecraft Until 2018

British firm says its space station cameras to provide Web images

The go-ahead is given for Arianespace's February 6 flight with Ariane 5

SpaceX's next cargo mission to space station is Mar 16

Both payloads for Arianespace's next Ariane 5 flight are mated to the launcher

45th Space Wing Supports NASA Launch

One planet, two stars: new research shows how circumbinary planets form

First Weather Map of Brown Dwarf

NASA-Sponsored 'Disk Detective' Lets Public Search for New Planetary Nurseries

Astronomers create first map of weather on nearby brown dwarf star

Amazon buys videogame studio Double Helix

Diagnosis just a breath away with new laser

A Proposal For The Space Debris Society

Google mystery barge may be homeless

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement