Mubasher: Twitter Inc. on Thursday reported strong profits and revenues in the fourth quarter of 2017, exceeding analysts’ forecasts.
The social media platform logged $91.07 million in profits between October and December 2017 against $167.05 million in losses in the year-ago period.
Twitter’s earnings per share (EPS) excluding non-recurring items reached $0.19 per share in Q4-17 versus losses per share (LPS) of $0.11 in the same period of 2016.
Analysts had forecast an EPS of $0.14 for the period.
Twitter’s revenues also grew to $731.6 million from $717.2 million in the three months ended 31 December 2016. The data was higher than analysts’ projections of $686.1 million in revenues in Q4-17.
For the full-year 2017, the 280-character per post platform logged $2.4 billion in revenues, down from $2.5 billion in 2016.
Following the announcement, Twitter’s shares jumped 22% in premarket trading on Thursday, and last traded 26.72% higher at 1:42 pm GMT.
The rise comes on the back of the higher than expected results as well as having logged its first generally accepted accounting principles (GAAP) profitability.
"This quarter was a major step in the right direction that shows the monetisation and ad growth machine at Twitter is finally heading in the right direction after years of a 'one step forward two steps back' strategy," MarketWatch reported citing a note by GBH Insights analyst Daniel Ives.
"Overall, Q4-17 was a breath of fresh air for investors that have patiently awaited for this turnaround story to manifest after years of pain and it looks like the Twitter growth train is back on track," the analyst stated.
Ives further added that Twitter could benefit in the “immediate term” from the changes its competitor Facebook Inc. was making to its news feed. He said that that these tweaks might prompt publishers and advertisers “to more seriously consider Twitter's platform,” according to MarketWatch.
Despite the positive results, Ives maintains his neutral rating on Twitter Inc.’s shares, adding that "clear execution/competitive challenges remain".
Twitter’s shares have surged by as much as 44% in the past 12 months.
