Social media giant Twitter released its first-quarter earnings report on Thursday, reporting slightly lower losses that most analysts had forecasted. Despite its better-than-expected results, the company's share prices still fell as investors continue to be concerned about its performance in the coming monhts given the potential global ad spending contraction.
In its report, Twitter revealed that it saw a 26 percent increase in its daily users that are actively viewing ads to 166 million. The figure is 2 million uses above analysts' estimates. Ad sales for the quarter, particularly in Asia, have reportedly rebounded. Twitter stated that it has accelerated efforts to attract more advertisers in the region.
For the first quarter, Twitter report revenues of $808 million, a 3 percent increase when compared to the same period last year. The figure is slightly above the $766 million initially estimated by analysts. Due to increased spending during the quarter, Twitter reported a loss of $8 million for the period or roughly a penny per share. The company plans to remedy the situation with a number of cost-cutting measures, including limiting its hiring of new product development and user support workers.
Following the release of its earnings report, Twitter's share prices surged by 11 percent. The gains were however completely wiped out during the rest of the day's trading, closing 4.8 percent below its starting price.
Twitter neglected to provide guidance for investors for the second quarter. However, its chief financial officer, Ned Segal, did point out during the company's conference call with analysts that it had experienced a 27 percent year-on-year ad revenue decline during the March 11 to March 31 period. This has been taken as a sign by some analysts of further declines last month.
Segal hinted that the decline during March was particularly pronounced in the US, its largest market based on revenues. While China has already lifted most of its restrictions, the US is still currently in the midst of the economic impact of the coronavirus pandemic. The ongoing shelter-in-place orders and lockdowns in some states have caused some businesses to close, while others are tightening their belts to prepare for what is to come.
The company is the latest US tech giant to report earnings that had only been lightly impacted by the coronavirus pandemic. Companies such as Facebook and Google parent company Alphabet both reported growth in revenues and earnings for the first quarter. However, the companies have warned that they could be seeing growth declines in the coming months given the possibility of advertising budget cuts as businesses attempt to cut costs.
