NEW YORK – Twitter shares plunged 20.81 percent to $30.75 on Thursday on the New York Stock Exchange after announcing quarterly results reflecting a sizable reduction in profits and a deceleration in earnings between July and September due to technical errors that hurt its advertising business.
In the third quarter of its fiscal year, a period that Wall Street analysts had focused on intently, Twitter’s profits collapsed by about 95 percent to $36.5 million even though the firm’s income increased by almost 9 percent to $823.7 million. Nevertheless, the results show a sharp deceleration in growth.
Referring to its billing, the firm acknowledged in a letter to shareholders that it had experienced “bugs” that decisively affected its ability to “target ads and share data with measurement and ad partners.”
The firm also said that it “discovered that certain personalization and data settings were not operating as expected. We believe that, in aggregate, these issues reduced year-over-year revenue growth by 3 or more points in Q3.”
In all, Twitter’s advertising earnings totaled $702 million for the quarter, an interannual increase of 8 percent, but the company was still unable to achieve an overall earnings beat.
Wall Street investors exhibited considerable concern over the firm’s outlook and the fact that Twitter said these problems will weigh on performance in the fourth quarter and also could affect its 2020 results.
“Despite its challenges, this quarter validates our strategy of investing to drive long-term growth. 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 mDAU,” said Twitter’s chief financial officer, Ned Segal.
Ninety minutes after the market opened on Thursday morning, Twitter’s shares were down 19.08 percent at $31.42, a 9.17 percent drop since their level at the beginning of 2019, and by the end of the day they had slid even further to end the session at $30.75.