Twitter shares rise on strong Q2 sales

Twitter Inc. reported secondquarter sales that topped analysts’ projections, a bright spot for the growth-challenged company as it seeks a new chief executive. Shares jumped as much as 12 per cent.

In the second quarter, revenue rose 61 per cent to US$502.4 million, the socialmedia company said Tuesday in a statement. That exceeded analysts’ average projection for US$481.9 million, according to data compiled by Bloomberg.

As interim CEO Jack Dorsey races to update Twitter’s offerings to attract a broader range of users, its sales team has been making deals to help advertisers use the site more effectively and get more out of their marketing spending. The moves are giving Twitter some time to solve its underlying problem: It’s much smaller than the competition. The

We are not satisfied with our growth in audience

company today reported 316 million monthly users, while Facebook Inc.’s social network has 1.4 billion.

“We should start to see the benefit of some of the deals they’ve done, like the search partnership with Google and the DoubleClick partnership,” said James Cakmak, an analyst at Monness Crespi Hardt & Co., who rates the shares the equivalent of a hold.

Shares of San Franciscobased Twitter gained 4.5 per cent in extended trading after climbing as high as US$41. They rose 5.3 per cent to US$36.54 at the close in New York. The stock has gained 1.9 per cent this year.

Former Twitter CEO Dick Costolo was replaced this month on an interim basis by co-founder Dorsey, who also runs Square Inc., a mobilepayments company. Twitter is conducting a search for a permanent CEO, and has ruled out Dorsey as long as he stays full time at Square.

Twitter’s second-quarter net loss narrowed to US$136.7 million, or US21 cents a share. Profit excluding certain items was US7 cents, compared with the 4 cents analysts estimated.

Twitter recently started counting feature-phone users in emerging markets as part of its user count. Without that extra boost, Twitter only added 2 million users in the quarter — up less than 1 per cent from the prior period — to 304 million.

“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” Dorsey said in the statement. “In order to realize Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value.”

In the time since Twitter went public in November 2013, growth has stagnated while rival social applications, including WhatsApp and Facebook Messenger, drew hundreds of millions more people.