Twitter shares plunge after weak third-quarter report, forecast

Twitter shares plunged on Thursday after the company reported third-quarter sales that missed expectations and said fourth-quarter revenue would be lower than projected.

The social media giant reported that sales in latest quarter increased 8.6 percent to $823.7 million, below predictions of $876 million. It also said revenue for the three months ending in December would top out at $1.01 billion rather than the projected $1.06 billion.

Its shares fell 15 percent after the market opened.

{mosads}“Greater-than-expected advertising seasonality” and “revenue product issues” were to blame for the disappointing results, the company said in a letter to shareholders.

Twitter earlier this year outlined settings issues that had allowed it to access users’ data without their permission to display targeted advertisements and measure their effectiveness for marketers. Its letter indicated that removing that data adversely affected the company.

The company was far more bullish on Thursday about user growth in the third quarter, saying it added 6 million daily active users to reach 145 million. That marked a 17 percent increase from a year ago and a 4 percent quarter-to-quarter increase.

“Despite its challenges, this quarter validates our strategy of investing to drive long-term growth,” Chief Financial Officer Ned Segal said in a statement.

“More work remains to deliver improved revenue products. We’ll continue to prioritize our ad products along with health and our investments to drive ongoing growth” in daily active users the company can monetize, he added.