Twitter’s (TWTR) earnings report is out, and Wall Street is far from enthused thanks to some discouraging user statistics. Following a brief spike higher, TWTR stock dropped like a rock in early after-hours trading, off 11% as of this writing — though it still stands at well more than double Twitter’s $26 IPO price.
Fourth-quarter Twitter earnings came to 2 cents per share on an adjusted basis, which beat the Street consensus for a net loss of 2 cents. Meanwhile, revenues more than doubled year-over-year to $242.7 million, which was well ahead of expectations for $217.8 million.
The outlook was encouraging, too. TWTR is pegging current-quarter revenues in a range of $230 million to $240 million, well ahead of analysts’ mark of $215 million.
All in all, the financial results were solid, which is why the initial response was a nearly 7% jump in TWTR stock.
However, investors were spooked by Twitter’s user growth — or lack thereof.
Twitter’s monthly active user (MAU) count reached 241 million, which means it added a mere 9 million users in the fourth quarter. Investors were expecting a gain of more than double that, pegging MAUs at 250 million.
TWTR stock had headed more than 10% higher in the week leading up to the report, but as of this writing, that had been erased and then some.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.