The Q3 2014 earnings report for Twitter Inc (NYSE: TWTR), who's potential benchmarks include social media stocks Facebook Inc (NASDAQ: FB) and LinkedIn Corp (NYSE: LNKD), is scheduled for after the market closes on Monday (October 27th). Aside from the Twitter Inc earnings report, it should be said that Facebook Inc will report Q3 2014 earnings after the market closes next Tuesday (October 28th) and LinkedIn Corp will report Q3 2014 earnings after the market closes next Thursday (October 30th). Shares soared around 30% the last time when Twitter Inc reported stronger than expected earnings.
What Should You Watch Out for With the Twitter Inc Earnings Report?First, here is a quick recap of Twitter Inc's recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:
| EPS Est | N/A | -0.02 | -0.03 | -0.01 |
| EPS Actual | N/A | 0.02 | 0.00 | 0.02 |
| Difference | N/A | 0.04 | 0.03 | 0.03 |
| Surprise % | N/A | 200.00% | 100.00% | 300.00% |
| Current Estimate | 0.01 | 0.06 | 0.10 | 0.38 |
| 7 Days Ago | 0.01 | 0.06 | 0.10 | 0.37 |
| 30 Days Ago | 0.01 | 0.06 | 0.10 | 0.37 |
| 60 Days Ago | 0.01 | 0.06 | 0.10 | 0.36 |
| 90 Days Ago | 0.00 | 0.06 | 0.04 | 0.27 |
Back in late July, Twitter Inc reported that second quarter revenues were up 124% to $312 million while the GAAP net loss was $145 million (including $158 million in stock-based compensation expense) verses $42 million in the same period last year. Key operational highlights include a 24% year-over-year increase in Average Monthly Active Users (MAUs) to 271 million as of June 30th, Mobile MAUs increased 29% year-over-year to reach 211 million (representing 78% of total MAUs), timeline views increased 15% year-over-year to reach 173 billion and advertising revenue per thousand timeline views increased 100% to $1.60. The company also raised its revenue outlook for the year to between $1.31 billion to $1.33 billion – up from an earlier guidance of $1.2 billion to $1.25 billion.
After earnings, Sterne Agee analyst Arvind Bhatia commented:
"The expectations going in had become quite low. Even in the U.S. their performance was good. For now, that will put to rest some of the concerns about U.S. growth… One would still have to say that the jury is still out. You have to look maybe at what happens in the next quarter and see if they can continue to have upside on the user growth."
However despite the efforts of Twitter Inc's CEO to refocus the narrative on year-over-year growth and other numbers that look good, some on Wall Street did notice that MAUs only grew 6% sequentially, roughly the same percentage number they grew in the first quarter.
The latest technical chart for Twitter Inc shows shares dipping and then bottoming out by May before trending upward again:
Long term performance charts show that both Facebook Inc and LinkedIn Corp, despite some hiccups, have put in pretty decent performances for retail investors.
Technical charts for both Facebook Inc and LinkedIn Corp show spring time dips that both have largely recovered from:
At some point, investors will begin to notice if Twitter Inc is not showing solid sequential growth numbers along with something at the bottom line. As what Arvind Bhatia said, the jury is still probably out on Twitter Inc and whether its a better bet than social media giant Facebook Inc and professional networking stock LinkedIn Corp.
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