Twitter Profits, Revenues Outweigh Slowing User Growth

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Twitter Inc. (NYSE: TWTR) reported fourth-quarter and full-year 2014 results after the markets closed Thursday. For the quarter, the social messaging company posted adjusted diluted earnings per share (EPS) of $0.12 on revenues of $479.08 million. In the fourth quarter of 2013, the company reported EPS of $0.02 on revenues of $242.68 million. The Thomson Reuters estimates for the quarter called for EPS of $0.06 and $453.14 million in revenue.

For the full year, the company reported EPS of $0.14 on revenues of $1.4 billion, compared with an EPS loss of $0.18 on revenues of $664.89 million in 2013. Analysts were looking for EPS of $0.09 and revenues of $1.38 billion.

The number everyone wants to see get bigger faster is average monthly active users (MAUs). Twitter claimed 288 million MAUs, up 20% year-over-year. That number represents a loss of 4 million net MAUs in the quarter, which the company attributed to changes in third party integrations. That number is good, but not good enough — the consensus estimate for MAUs was 295 million. Mobile MAUs represent about 230 million users, or 80% of the total.

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Advertising revenue per thousand timeline views rose to $2.37 in the fourth quarter, up 23% compared with the same quarter a year ago. Timeline views totaled 182 billion in the quarter, up from 181 billion in the prior quarter.

Adjusted EBITDA for the fourth quarter totaled $141.49 million and for the year the total was $300.9 million.

In its outlook the company said first quarter revenue is projected in a range of $440 million to $450 million and adjusted EBITDA will range from $89 billion to $94 billion. For the full fiscal year, revenue is expected to range between $2.3 billion to $2.35 billion and adjusted EBITDA is targeted at $550 million to $575 million. Estimates are based on current foreign exchange rates.

The full-year outlook is well above 2014 performance, and even though user growth was slower than expected, the sharp projected improvements in adjusted EBITDA and revenues are dominating investors’ after-hours decisions.

Shares closed at $41.26 Thursday, in a 52-week range of $29.51 to $58.98. Shares traded up about 9% after-hours at $44.90. Thomson Reuters had a consensus analyst price target of around $50.00 before the report.

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