Twitter’s 3Q Report Illustrates Challenges Facing New CEO

Twitter's latest financial report conveyed a succinct message: CEO Jack Dorsey has his work cut out as he tries to attract more people to one of the Internet's most influential means of communications.

The challenges facing Dorsey [pictured] came into sharper focus with Tuesday's release of Twitter's results for the three months ending in September. The numbers covered a stretch when Dorsey was serving as interim CEO before Twitter hired him on a permanent basis a month ago.

Twitter ended the third quarter with a core audience of 307 million active users, an increase of just 3 million from June. That wasn't much better than a gain of 2 million users in the previous quarter, a letdown that led to the departure of Twitter's previous CEO, Dick Costolo.

Revenue climbed 58 percent from last year to $569 million.

Twitter still lost $132 million, extending the company's uninterrupted history of losses since Dorsey co-founded the service nearly a decade ago. The San Francisco company has now accumulated losses of about $2 billion.

It doesn't look like Twitter is going to regain a lot of momentum in the current quarter, which ends in December. The company projected its revenue will range from $695 million to $710 million in the period, missing a target of $749 million set by analysts surveyed by Zacks Investment Research.

The evidence of Twitter's ongoing malaise reversed a recent rally in Twitter's stock, which reflected investor optimism of a quick turnaround under Dorsey's leadership.

Twitter's stock plunged $3.69, or nearly 12 percent, to $27.65 in extended trading after the report came out.

Although it remains still commands a large audience, Twitter has been having trouble attracting more traffic since its initial public offering of stock two years ago. Facebook and other rival services have been faring far better over that time.

Dorsey has vowed to come up...

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