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by Meredith Mazzilli
(Reuters) – Twitter on Friday reported fewer active users than badysts expected and warned that this much-watched figure could continue to fall with account deletions.
Twitter action falls by about 15% in pre-market transactions on Wall Street after a plunge of nearly 19% by social networking giant Facebook, who warned that its margins risked to fall in the coming years.
Twitter explained that the work of purging unwanted or automatically created accounts had affected its second quarter figures.
The number of monthly active users of the microblogging platform has decreased from one million to 335 million compared to the previous quarter.
Analysts expect an average of 340 million active users in the third, according to Thomson Reuters consensus I / B / E / S.
Twitter has instead said it would record a further decline in the number of users, of the order of five million, corresponding to a monthly average of 330 million over the period.
"SURREACTION"
"Investors are overreacting to trends (on the monthly number of active users)," said Richard Greenfield, badyst at BTIG. "This is an overreaction identical to the one we saw in the second quarter of last year, and the second quarter of 2017 was an incredible opportunity to buy the stock."
Twitter, like Facebook, is urged by the authorities of several countries to hunt hate speech, dubious content and dissemination of false information ("fake news").
"We make decisions to prioritize remediation initiatives over short-term improvements that could increase the use of Twitter as a daily service," writes the company in a letter to its shareholders on occasion
Analysts were expecting a gain of one million users in the second quarter, and the figures released rekindle concerns over Twitter's lack of a clear strategy to address the various problems faced by its platform.
General Manager Jack Dorsey said in a statement that the number of daily users had increased by 11% year-on-year. In his eyes, this shows that the regulation of "problematic behavior" confirms the status of Twitter as a service of first necessity.
Twitter, which does not communicate the number of its daily users, said in July that the deletion of accounts fictitious would not have a significant impact on the number of active monthly users, the figure most followed by advertisers.
Fictitious accounts purchased by some users to artificially inflate their popularity on the social network have been a source of tension in the relationship between Twitter and advertisers.
Quarterly revenue of $ 711 million ( EUR 611 million), increased by 24% and exceeds the Reuters consensus which gave it to 696 million.
EFFECT CUP OF THE WORLD
Twitter said it had benefited in the second quarter from an effect Football World Cup, the commercials related to the event generating $ 30 million in revenue.
The profit came out at $ 100 million, with a boost of $ 42 million thanks to tax reform in the United States.
Adjusted earnings per share is 17 cents, consistent with Thomson Reuters consensus.
Twitter has posted the first quarterly profit in its history over the last three months of 2017 and has been in the green since then. Group warned in the first quarter that its revenue growth would slow down this year and that its costs would increase.
The increase in video programming, with new programs and live sports, and the development of new technologies to automatically identify relevant content based on profiles, should make the service more attractive to new users, said Twitter.
The group added that it had lost a number of users since the entry into force of the European Regulation on the protection of personal data (RGPD) in May without this having had a negative impact on its figure
It has raised its capital investment forecast in the range of $ 450 to $ 500 million from $ 375 to $ 450 million previously to reflect the development and improvement of the supporting IT infrastructure. his service.
Costs related to video programming and automated user data badysis contributed to an increase in expenditures to $ 631 million over the quarter, up 10% from the same period a year ago .
(Wilfrid Exbrayat and Marc Joanny for the French service, edited by Bertrand Boucey)
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