Most of the advertising revenue is generated by selling its promoted products. This consists of promoted tweets, which appear within a timeframe, search results or profile pages just like an ordinary tweet regardless of device, promoted accounts, and promoted trends.
The company is expected to continue investing in revenue products as it works to improve ads platform and ad formats to deliver increased value to advertisers around the world. Advertising revenue continued to be driven by sales momentum with advertisers, built around differentiated ad formats, better relevance, and improved return on investment.
Analysts expect the company’s earnings to decline by 6.50% to $0.29 per share while revenue will jump by 9.70% to $996.73 million for the fourth quarter. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters. The majority of the analysts recommended a “hold” rating with an average price target of $34.08.
For the third quarter, Twitter posted a 95% dip in earnings due to an increase in costs and expenses. Revenue grew by 9% on strength in US advertising while revenue product issues and greater-than-expected seasonality reduced the top-line growth rate. The double-digit increases in both domestic and international ad revenue drove advertising revenue higher by 8%.
For the fourth quarter, the company expects total revenue in the range of $0.94-1.01 billion and operating income in the range of $130-170 million. For the full year 2019, capital expenditures are anticipated to be at or near the low end of the prior forecast range of $550-600 million. The stock-based compensation expense is now projected to be at or near the midpoint of its previous outlook of $350-400 million.
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