Photo Credit: Andreas Eldh

Twitter, Inc. (TWTR) Information Technology - Internet, Software & Services | Reports April 26, After Market Closes

At one time it was expected that Twitter would be able to mirror Facebook’s success, but that scenario is looking less likely these days. The social media outlet has been troubled since IPOing in 2013 as user engagement and new user signups diminish. Despite consistently beating earnings expectations and steadily rising revenue, the stock has plunged 66.6% in the past 12 months. Twitter’s strong earnings have also been somewhat misrepresentative, since the bar has been set so slow. Still, current expectations have both EPS and revenue increasing for another quarter.

The Estimize consensus is calling for EPS of $0.12 on $612.87 million in revenue, 2 cents higher than Wall Street on the bottom line and $6 million on top. Since its last report, earnings per share have been on a tear, rising 160% while sales have fallen 4%. Compared to a year earlier this predicts as a 60% increase on the bottom line on a 42% increase in sales.

Over the last several quarters, Twitter has had trouble expandings its user base and diversifying its revenue stream outside of its core business. Twitter’s user growth problem has been no secret. Last quarter the company reported 320 million monthly active users, up from a year earlier and flat from the previous quarter. Excluding SMS Fast Followers, monthly active users were actually down 20 million. Usage rate also declined in the quarter, reflecting Twitter’s inability to engage with its community. This will likely only get worse this quarter, with traffic acquisition costs rising.

On the bright side, Twitter recently secured a deal with the NFL to stream 3 games in the upcoming season. Despite a dwindling user base, earnings growth has been impressive and even comparable to its peers in Facebook and Linkedin. Given Twitter’s reach and size, investors are still holding onto hope that this company can turn around.