Twitter’s hopes of finding a good acquisition deal are now gone. So, it looks like the company is now on its own. With prospective buyers not at all committed to a deal, Twitter has to build a solid, profitable business on its own. Fortunately for the company, its third quarter results were very good. Twitter exceeded the expectations of Wall Street all across the board. Also, the company is going to undergo an effort to restructure itself. Twitter has to become a company that can run on its own. And at the same time keep Wall Street happy.
Twitter Reports Better Than Expected Results
In order to restructure and streamline the company, Twitter is letting go of some of its staff. 9 percent to be exact. The jobs that are going to go are from departments like sales, marketing as well as partnerships. The move to lay off almost ten percent of its staff is hopefully going to make the company lighter on its feet.
Twitter is going to have to work hard to keep its head above water on its own. But the results for the third quarter show promise and the company might just be able to do it. The micro-blogging company reported earnings of 13 cents per share. As well as revenue of $616 million. The service grew its number of users to 317 million users. The growth that market analysts had anticipated for the company were more modest. Forecasts were around 9 cents per share in earnings and about $606 million revenue. The prospects showed a target of 315 million active users. That would have been 2 million users more than the previous quarter, when Twitter had 313 million active users. But the company outdid analyst expectations and reported more growth. As a result, shares in the company did very well.
Twitter Shares Go Up after Quarterly Report
The quarterly report gave Twitter a fresh boost of optimism. The company’s shares went up as much as 5 percent in pre-market trading. This is not a record for a company like Twitter, that has seen even better performance on the market. But it is still a good day for the company’s executives and employees. Twitter’s management had to watch the company’s stock stumble during the past year. However, the forecast for the company’s fourth quarter is uncertain. That has led to shares going down a bit. Now, they are up around 3.5 percent.
Analysts find it difficult to predict what lies ahead for Twitter. The company isn’t even reporting revenue guidance. Going against a tradition that most tech companies follow, Twitter is going to refrain from making any predictions. The company is hoping that this will help with managing expectations from Wall Street in the coming months.
Part of Twitter’s restructuring effort is going to affect its sales team. The company will be switching its sales team “from three sales channels to two”. Since the sales department is the main driver for business, this leaves questions regarding revenue up in the air. It remains to be seen if the company is going to land on its feet next quarter.
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