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As midterm election season comes around, social media site Twitter is catching heat for failing to stop fake news. Veuer’s Natasha Abellard has the story.
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WASHINGTON, DC – SEPTEMBER 5: Twitter chief executive officer Jack Dorsey testifies during a House Committee on Energy and Commerce hearing about Twitter’s transparency and accountability, on Capitol Hill, September 5, 2018 in Washington, DC. Earlier in the day, Dorsey faced questions from the Senate Intelligence Committee about how foreign operatives use their platforms in attempts to influence and manipulate public opinion. (Photo by Drew Angerer/Getty Images) ORG XMIT: 775221814 ORIG FILE ID: 1027231376(Photo: Getty Images)

Twitter continued to shed users as part of its efforts to clean up the social network. However, the company posted revenue and profit for the third quarter that outperformed Wall Street’s expectations.

The company reported 326 million monthly active users during the third quarter (July to September), a decline of 4 million, or 1 percent, from a year ago when it had 330 million.

But compared to the previous three-month period (April to June) when it had 335 million monthly active users, Twitter lost 9 million amid the company’s attempt to address “the health of the platform,” the network said in its earnings announcement.

Twitter and Facebook have both focused on ridding their platforms of fake accounts in the wake of Russian influence on their sites, something that occurred during and since the presidential campaign.  “We’re doing a better job detecting and removing spammy and suspicious accounts at sign-up,” said Jack Dorsey, Twitter’s CEO, in a statement accompanying the company’s financial release.

During the quarter, Twitter generated revenue of $758.1 million, a 29 percent increase over the previous year. That surpassed expectations of $700.75 million, according to analysts polled by S&P Global Market Intelligence.

Driving the increase: advertising revenue of $650 million, an increase of 29 percent over a year ago.

Twitter reported net income $789 million, or $1.02 a share, compared to a $21.1 million net loss, and a loss of 3 cents per share, in the same period a year ago. The quarter’s net income included the release of deferred tax asset valuation allowances of $683 million. Analysts had expected net income of $27.28 million, or 3 cents per share.

Twitter stock (TWTR) jumped more than 14 percent in premarket trading to $31.59.

Twitter’s emphasis on improving the network could reap benefits, said Michael Pachter. managing director of equity research for Wedbush Securities in Los Angeles, who has a neutral rating on the stock, with a 12-month target price of $37.

“Twitter appears to have its revenue growth back on track overall, and once it laps the hiccup from purging accounts, we expect the company to emerge in better overall health,” he said in a note to investors earlier this week.

While Twitter expects to see a continued decline in monthly active users from its clean-up efforts, daily active users — a metric Twitter uses as a sign of engagement by its most fervent users — rose 9 percent during the quarter.

“This is what happens when you focus on improving the product day-in and day-out,” tweeted Rich Greenfield, a media and technology analyst with financial services firm BTIG in New York.

Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
 

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