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Twitter (TWTR) to Report Q1 Earnings: What's in the Cards?
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Twitter is set to report first-quarter 2020 results on Apr 30.
The Zacks Consensus Estimate for revenues stands at $782.6 million, indicating a decline of 0.6% from the year-ago quarter’s reported figure.
Meanwhile, the consensus mark for first-quarter earnings has been steady at 12 cents over the past 30 days, implying a decline of 42.9% from the year-ago quarter reported figure.
On Mar 23, in an 8k filing, this social media company announced withdrawal of its first-quarter 2020 revenue and operating income guidance due to the pervasive impact of coronavirus (COVID-19) anxiety on advertiser demand.
The company now expects first-quarter 2020 revenues to decline from the year-ago reported figure. Twitter’s previous projection for total revenues was between $825 million and $885 million.
Notably, the company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average positive surprise being 9.13%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Consider
Twitter’s ad revenues are likely to have taken a hit since small businesses that primarily use social media platforms are likely to curb ad spending as a contingent measure to cope with the coronavirus-led crisis.
Moreover, Twitter has become the go-to platform for news about coronavirus. Some brands are hesitant to advertise alongside coronavirus discussions in social media platform. Such companies are likely to have withdrawn ad contracts with Twitter in the to-be reported quarter for fear of associating their brands with the sensitive topic.
Nonetheless, management at Twitter stated that total monetizable DAU (mDAU), which measures the number of users, has been benefiting from frequent discussions on the burning issue of coronavirus and an improving product experience.
As of Mar 23, quarter to date, average total mDAU reached approximately 164 million, up 23% from 134 million in first-quarter 2019 and 8% from 152 million in fourth-quarter 2019.
The company’s initiatives to remove more than 1,100 misleading and potentially damaging tweets since Mar 18 are expected to have helped it expand the monetized user base in the to-be-reported quarter.
Additionally, Twitter updated its strategy for monitoring tweets during the outbreak, which includes reviewing the rules and considering the ways in which it may need to evolve to account for new account behavior during the quarter, which is likely to have reduced abuse on the platform.
Twitter’s improved ability to proactively identify and remove abusive content from the platform has been a notable development in this regard.
Moreover, the company’s updated policies to ban political ads are expected to have boosted trustworthiness of the platform.
Further, steady demand for video ad products like Video Website Cards and in-stream pre-roll is likely to have contributed to the top line.
The Zacks Consensus Estimate for advertising revenues is pegged at $674 million, indicating growth of 1.8% from the year-ago quarter’s reported figure.
Key Developments in Q1
During the first quarter, Twitter announced that Silver Lake, a global leader in technology, will make a $1 billion investment in Twitter.
Additionally, Twitter entered into a cooperation agreement with Elliott Management Corporation, an investment firm whose affiliated funds own around 4% of the company’s common stock and economic equivalents.
The company expects to use Silver Lake’s investment, together with cash on hand, to fund a $2 billion share repurchase program that will be executed over time.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Twitter has an Earnings ESP of -14.29% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Twitter (TWTR) to Report Q1 Earnings: What's in the Cards?
Twitter is set to report first-quarter 2020 results on Apr 30.
The Zacks Consensus Estimate for revenues stands at $782.6 million, indicating a decline of 0.6% from the year-ago quarter’s reported figure.
Meanwhile, the consensus mark for first-quarter earnings has been steady at 12 cents over the past 30 days, implying a decline of 42.9% from the year-ago quarter reported figure.
On Mar 23, in an 8k filing, this social media company announced withdrawal of its first-quarter 2020 revenue and operating income guidance due to the pervasive impact of coronavirus (COVID-19) anxiety on advertiser demand.
The company now expects first-quarter 2020 revenues to decline from the year-ago reported figure. Twitter’s previous projection for total revenues was between $825 million and $885 million.
Notably, the company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average positive surprise being 9.13%.
Twitter, Inc. Price and EPS Surprise
Twitter, Inc. price-eps-surprise | Twitter, Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Consider
Twitter’s ad revenues are likely to have taken a hit since small businesses that primarily use social media platforms are likely to curb ad spending as a contingent measure to cope with the coronavirus-led crisis.
Moreover, Twitter has become the go-to platform for news about coronavirus. Some brands are hesitant to advertise alongside coronavirus discussions in social media platform. Such companies are likely to have withdrawn ad contracts with Twitter in the to-be reported quarter for fear of associating their brands with the sensitive topic.
Nonetheless, management at Twitter stated that total monetizable DAU (mDAU), which measures the number of users, has been benefiting from frequent discussions on the burning issue of coronavirus and an improving product experience.
As of Mar 23, quarter to date, average total mDAU reached approximately 164 million, up 23% from 134 million in first-quarter 2019 and 8% from 152 million in fourth-quarter 2019.
The company’s initiatives to remove more than 1,100 misleading and potentially damaging tweets since Mar 18 are expected to have helped it expand the monetized user base in the to-be-reported quarter.
Additionally, Twitter updated its strategy for monitoring tweets during the outbreak, which includes reviewing the rules and considering the ways in which it may need to evolve to account for new account behavior during the quarter, which is likely to have reduced abuse on the platform.
Twitter’s improved ability to proactively identify and remove abusive content from the platform has been a notable development in this regard.
Moreover, the company’s updated policies to ban political ads are expected to have boosted trustworthiness of the platform.
Further, steady demand for video ad products like Video Website Cards and in-stream pre-roll is likely to have contributed to the top line.
The Zacks Consensus Estimate for advertising revenues is pegged at $674 million, indicating growth of 1.8% from the year-ago quarter’s reported figure.
Key Developments in Q1
During the first quarter, Twitter announced that Silver Lake, a global leader in technology, will make a $1 billion investment in Twitter.
Additionally, Twitter entered into a cooperation agreement with Elliott Management Corporation, an investment firm whose affiliated funds own around 4% of the company’s common stock and economic equivalents.
The company expects to use Silver Lake’s investment, together with cash on hand, to fund a $2 billion share repurchase program that will be executed over time.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Twitter has an Earnings ESP of -14.29% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Pixelworks (PXLW - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>