Shares fell as low as $13.31 after the closing bell. Prior to the earnings report, Twitter shares had closed up 4 percent to $14.98 apiece.
The company reported revenue of $710 million the last three months of 2015, meeting estimates by analysts.
However, Twitter’s monthly active users remained at 320 million, the same as the third quarter.
Following some optimism after Jack Dorsey returned as CEO last year, the San Francisco company once again is facing serious doubts about its viability and growth potential.
The company’s stock closed at an all-time low Tuesday for the third day in a row, closing at $14.40. Shares are down 38 percent this year.
Robert Peck of SunTrust Robinson Humphrey said Wednesday’s earnings would be a “seminal moment” for Dorsey and the Twitter team given the company’s recent executive departures, stock price declines and negative investor perception.
Dorsey “is tasked with articulating the vision for the company heading into 2016 and beyond. He must be able to give employees and Wall Street a reason to believe,” Peck wrote in a research note. “Without this, the stock could continue to be under pressure.”
Analysts surveyed by FactSet are expecting adjusted earnings of 12 cents a share, which would be flat compared with the same quarter a year earlier. Revenue is expected to be $710 million.
Dorsey has been trying to lead a revamp of the Twitter service, and ahead of earnings on Wednesday, the company revealed a new Timeline that shows tweets out of order — a controversial move that takes away from Twitter’s real-time feel.
An earlier change, Moments, which curates and promotes popular tweets, was not well-received.
“We do not think that Moments drove a meaningful increase in users, as much of the content remains outdated or irrelevant,” Wedbush Securities analyst Michael Pachter said in a note to investors last week. “In addition, Twitter remains difficult to use relative to its peers, and a solution does not appear to be imminent.”
©2016 Los Angeles Times Distributed by Tribune Content Agency, LLC.
