May 1 (UPI) — Twitter’s first-quarter results released Thursday local time show that its first-quarter visits rose sharply in the quarter to get timely information about the new corona outbreak, but the company’s main source of revenue advertising business was hit hard by the outbreak. Twitter plunged 7.75 percent, its biggest one-day drop since March 18, dragged down by the negative news.
Twitter shares fell $2.41, or 7.75 percent, to $28.68 on the New York Stock Exchange on Thursday. In after-hours trading, the stock fell another $0.58, or 2.02 percent, to $28.10.
Twitter’s first-quarter revenue was $808 million, up 3 percent from a year earlier, its smallest quarterly revenue increase in more than two years, as its advertising business fell because of the outbreak.
The company said sales were down 27 percent from a year to the end of the first quarter, a similar month in April. The decline was particularly pronounced in the United States, Twitter’s main market.
Like other social platforms such as Snap and Facebook, Twitter’s numbers challenge the long-held view that increased users are proportional to growth in advertising revenue.
Twitter now has 166 million daily users, up 24 percent from a year earlier and 152 million at the end of 2019. It was the biggest year-on-year increase since the company began reporting user numbers in 2016. Twitter attributed the growth to “typical seasonal forces, ongoing product improvements, and global interactions related to the Covid-19 pandemic.” “
Facebook also warned on Wednesday that its “advertising industry could contract more severely.” “
Twitter said Thursday that improving its advertising products is now the company’s “top priority.” In a letter to shareholders, the company said improving its advertising products would increase demand for advertising during the downturn.
Twitter attracts brand marketing ads that are easier to measure, grow faster and be more resilient during crises.
Twitter posted a net loss of $8 million in the first quarter, its first quarterly loss in more than two years. The company had previously cut its full-year earnings forecast and forecast an operating loss for the first quarter. On Thursday, the company did not release its future earnings forecast.
Twitter plans to cut costs by slowing hiring and travel and marketing campaigns, and in fact the outbreak has led to employees working from home and has halted company-related activities. But the company still plans to build a new data center by 2020, as it has previously announced.
Earlier this year, activist shareholders tried to oust Jack Dorsey from twitter’s role as chief executive. However, the effort by activist shareholders has not been successful. The two sides agreed on performance targets such as Twitter’s revenue growth. However, some analysts believe that the outbreak has had a serious impact on Twitter, and Dorsey’s CEO position stability may be affected. (Tianmen Mountain)