Twitter Inc (TWTR), eBay Inc (EBAY) Earnings Analysis

Twitter Inc (TWTR), eBay Inc (EBAY) Earnings Analysis
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Twitter Inc (NYSE:TWTR) and eBay Inc (NASDAQ:EBAY) both disappointed the Wall Street with their latest quarterly results. Shares of the microblogging company sank 11.85% after the results to $37.57. Meanwhile, eBay stock went down by 4.38% to $52.15. Twitter’s first quarter results were mixed. Though revenues and adjusted EBITDA exceeded expectations. Sterne Agee analysts Arvind Bhatia and Brett Strauser said that user metrics improved from the previous quarter, but were below the Wall Street expectations. Stern Agee has a Neutral rating on Twitter.

Twitter’s user metrics spark concerns

Twitter Inc (NYSE:TWTR) reported Q1 revenue of $250 million, beating the analysts’ estimate of $248 million. Sterne Agee expecting $248 million in revenues. Its adjusted EBITDA of $37 million was higher than the consensus of estimate of $18 million. Advertising revenue came in at $226 million, beating the consensus estimate of $220.7 million. Data licensing revenue of $24 million was also better than the consensus estimate of $21.4 million.

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For the current quarter, Twitter Inc (NYSE:TWTR) calls for revenues in the range of $270-$280 million. The San Francisco-based company expects its adjusted EBITDA to come between $25-$30 million. Analysts polled by Thomson Reuters estimate the company’s Q2 revenues to come at $272 million with $27 million in adjusted EBITDA. Notably, Twitter has raised its full year guidance from $1.15-$1.2 billion in revenues and $150-$180 million in adjusted EBITDA. Now the company forecasts its full year revenues in the range of $1.2-$1.25 billion and adjusted EBITDA of $180-$205 million.

What disappointed investors was Twitter Inc (NYSE:TWTR)’s slowing user growth and engagement. The company ended the quarter with 255 million monthly active users (MAUs), compared to the analysts’ estimate of 257 million. Twitter said its total timeline views clocked 157 billion, well below the market expectations of 164.96 billion. Timeline views per monthly active user were 614, missing the consensus estimate of 650.

eBay issues soft Q2 guidance, repatriates $9 billion

On the other hand, e-commerce giant eBay Inc (NASDAQ:EBAY)’s first quarter revenues soared 14% to $4.26 billion. The company reported non-GAAP earnings of $0.70 per share. Analysts were expecting $4.23 billion in revenues and $0.67 in non-GAAP EPS. PayPal delivered a solid 19% growth during the quarter. But marketplace revenue growth decelerated from 12% in Q4 to 9% in the latest quarter.


eBay Inc (NASDAQ:EBAY) spent $1.8 billion on share buybacks. The San Jose-based company said its non-GAAP operating margins fell by 50 basis points to 26.9%. Morgan Stanley analysts Stephen Shin and Jordan Monahan said that higher spending and sluggish marketplace growth continue to overshadow PayPal’s solid performance. Morgan Stanley has lowered its price target from $56 to $55 with a Neutral rating on the stock.


eBay Inc (NASDAQ:EBAY)’s current quarter EPS guidance fell short of Wall Street expectations. The company expects its second quarter net revenues between $4.32-$4.42 billion and non-GAAP EPS of 67-69 cents. eBay took at tax charge of close to $3 billion to repatriate $9 billion in cash held overseas to fuel its U.S. growth.

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