All about mobile for Twitter: Estimize
It’s another big week for tech earnings, which have been coming in mixed thus far. After Tuesday’s closing bell, Twitter (TWTR) will report for the first quarter. Currently, Estimize is looking for earnings per share (EPS) of $0.07, three cents above the Wall Street consensus and well above last year’s result of $0.00. Revenues are also poised for growth, with Estimize expecting $464M, above the Street’s $456M and denoting growth of 85%, strong but slowing from recent quarters.
Even in light of SunTrust’s Bob Peck downgrading the stock to “Neutral” from “Buy,” Estimize remains bullish on Twitter. While Peck downgraded the stock as a result of an overstretched P/E valuation, he increased expectations for forward earnings.
For Twitter, it’s going to be all about mobile again this season. Just last week Facebook (FB) announced that mobile ad revenue increased to 73% of overall ad sales, and while Twitter is still a year-and-a-half behind its peer, they are still doing a solid job of monetizing mobile. Just recently they pushed out app install ads which are thus far doing very well.
The company is also about to start monetizing Periscope, its video platform, and will be reporting on the benefits of newly added features such as Instant Timeline and Video. The recent deal with Google (GOOG) to bring tweets back to search should help drive results in the second half of the year.
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Fellow internet company, Yelp (YELP) is slotted to report after Wednesday’s close, and the outlook isn’t as bullish. Estimize is looking for EPS of $0.02 vs. the Street’s $0.01, falling well below last quarter’s result of $0.08. Revenue expectations of $119.2M are slightly below the Street’s guidance for $119.4M. While Yelp stands out in the mobile space and has been ahead of the curve on offering location based services, they seem to be losing steam, with engagement on mobile devices staying sequentially flat at 72 million in the latest quarter.
After posting its largest quarterly increase in user reviews in Q3 2014 (5.3M), that number dipped back down below 5M in Q4. Investors are seemingly losing faith in this name, with shares down over 9% this year. Wednesday’s results will have to indicate improvements in these areas, as well as provide updates on international expansion initiatives which helped boost the local ads division last quarter and makes up 80% of Yelp’s value.
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