Twitter to Report Q2 Earnings

Twitter Inc (NYSE: TWTR) is scheduled to report its earnings for the second quarter of the current fiscal year after the bell on Tuesday.

One day ahead of Twitter’s Q2 earnings release, the micro-blogging company revealed a new live streaming sports deal. The mentioned deal involves a live stream of weekly out-of-market games from the National Hockey league and the Major League Baseball, together with a nightly sports highlights program that will be shown exclusively on the platform.

This new deal is in line with the existing content deal of Twitter with the NFL and its collaboration with CBS to live stream the Republican and Democratic national conventions.

The micro-blogging corporation is enthusiastic to host this type of content that users want to view live, with hopes that the move will keep the existing users interested and also entice new users.

The number of Twitter users and the stagnating growth in users will most likely become the major focus in the company’s quarterly earnings report. The sluggish growth in users has pushed TWTR shares lower over the past 12 months.

Market analysts forecasted that Twitter will report that it only added 2 million monthly active users in the second quarter, in comparison to the previous quarter with estimates for less than 4 million monthly active users to be added in the third quarter.

Aside from the sluggish user growth, the company also has an issue with its revenue. If the micro-blogging company hits the analysts’ forecast of a revenue growth of 21 percent, this would reflect the most sluggish quarter of revenue growth since Twitter went public back in the year 2013. Meanwhile, earnings are estimated to grow 37 percent to 10 cents a share.

Shareholders will turn their focus on the commentary of Twitter CEO Mr. Jack Dorsey and COO Mr. Anthony Noto about the latest changes when it comes to its products. These changes include the enhancements in the registration process and the timeline, which serve as catalysts for better user growth and user engagement.

However, Morgan Stanley said that there is still uncertainty regarding the platform’s user growth.

According to the Morgan Stanley analyst Mr. Brian Nowak,”Our latest data and consistent commentary around the inability to break into the ‘mass market’ makes us wary of Twitter’s addressable audience.”

“The question marks around the company’s ability to drive future user growth appear unlikely to go away in the near. Time spent per existing user is also in decline,” he further added.

Investors can also anticipate a lot of management commentary regarding the partnerships related to live streaming, as well as how these moves will increase Twitter’s revenues.

Meanwhile, Mr. Doug Anmuth of JP Morgan stated that he is awaiting an update regarding “Twitter’s early efforts in selling available inventory around NFL games and other recent live streaming events.”

According to Rich Greenfield of BTIG, “We wonder whether Twitter’s focus on live video is a way to make Twitter more palatable as an acquisition candidate.”

“With Twitter’s pivot to live video, it potentially gives legacy media companies who are already heavily invested in sports (and news) a way to address their mobile shortcomings, while remaining focused on the content verticals they already prefer,” Greenfield said.

As of 6:31 AM GMT-4 on July 26, the stock of Twitter is trading at $18.65, up by 1.52 percent or 0.28 points.

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