Reports Q2 2019 results on Friday 26 July before the open
Income expectation: $ 828.9 million
EPS expectation: $ 0.18
If the recent past provides any clue, Twitter Inc (NYSE 🙂 is well set to produce another strong quarter when it reports tomorrow.
After the continuing reversal efforts of the past year, the company has achieved financial stability. Sales from advertisements increased by 18% in Q1, the fifth consecutive period of improvements.
On the expenditure side, Twitter demonstrated that it can meaningfully save costs in an era in which giants of social media are constantly under pressure to do more to protect their networks from manipulations. The end result is that profitability improves.
According to analysts' consensus estimates, Twitter is likely to show a 17% annual increase in revenue in 2Q to $ 829 million. Twitter probably earned an adjusted profit of $ 0.18 per share over the period, compared to the $ 0.17 it produced in the same period last year.
As the recovery continues, investors also become familiar with owning Twitter shares: it has won more than 30% this year to trade at the end of yesterday at $ 38.73.
What is impressive about Twitter's reversal is that the company has demonstrated that with a smaller group of daily-active users, it can still build a sustainable business that investors can rely on in this highly dynamic social media company environment.
In a latest development, media reported this week that the US Department of Justice is launching a broad antitrust investigation into whether dominant technology companies are unlawfully undermining competition, adding a new layer of uncertainty for social media companies such as Facebook (NASDAQ 🙂 and Google (NASDAQ :).
Success of Twitter clean-up discs
It is unclear whether Twitter will be included in this probe, but what gives us more confidence in the microblog site is that its CEO Jack Dorsey has been quite successful in his efforts to rid the site of toxic content in the midst of strong criticism that social media companies have failed to curb the exploitation of personal data, interference with elections and hateful messages.
According to Twitter, about 38% of the offensive content on the site is now detected by technology and marked for human review, compared to last year. These efforts have also restored the confidence of advertisers, who now see Twitter as a valuable platform to reach their audience. In the last quarter, Twitter placed a jump in the number of cashed-in daily active users to 134 million, with analysts defeating forecasts for around 128.4 million.
To further improve user engagement and entice advertisers, Twitter focuses more on video content partnerships with major media companies and brands. It has recently overhauled both the camera function and the desktop site. The company has also rolled out a Snapchat-like camera feature that allows users to post videos & # 39; s or photos & # 39; s in a swipe.
Bottom Line
Even after a powerful rally this year, Twitter shares are only about halfway up their highest point ever of $ 74.73 in December 2013. To continue this upward movement, we think Twitter should show sustainable revenue growth with an improvement of user statistics. We think the company has achieved a solid momentum by turning its platform into a platform that advertisers increasingly value. Any weakness after the win should be an opportunity for those looking for a good access point.
