Twitter tops Wall Street revenue target, user growth slows

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Twitter Inc said on Thursday the social media company is signing up users as quickly as most of last year after a fourth-quarter slowdown, boosting its shares 11 percent.

Twitter beat Wall Street's profit and revenue targets in the fourth quarter. User growth weakened in the quarter, but picked up in the new year, Chief Executive Dick Costolo said in a statement.

Twitter added 13 million to 16 million users in each of the first three quarters of 2014 and was on track to hit a similar number in the current quarter, it said. That compares with a rise of about 4 million in the fourth quarter to 288 million monthly users as of Dec. 31.

Costolo said on a conference call that quarterly specific factors, including seasonality and the launch of Apple Inc's new mobile operating system, slowed additions in the fourth quarter.

Shares of Twitter, which initially slipped after the results were released on Thursday, rose in after-hours trade to $45.91 from their closing price of $41.26.

Twitter, which allows users to broadcast 140-character messages, is among the world's best known social media services, used by politicians, celebrities and activists. But the company has struggled to grow, raising questions about whether it can achieve the scale of Facebook, the world's No.1 social network with 1.39 billion users.

Instagram, the photo-sharing app owned by Facebook, recently surpassed Twitter's audience size and announced it had 300 million monthly users.

Twitter said revenue in the quarter ended Dec. 31 rose to $479 million from $243 million in the year-ago period. Analysts polled by Thomson Reuters I/B/E/S had estimated $453.1 million.

Twitter posted a net loss of $125 million in the fourth quarter, or 20 cents per share. Excluding certain items, Twitter earned 12 cents per share, surpassing analysts' average estimate of 6 cents a share.

A string of senior executives have left the San Francisco company in the past six months, and CEO Costolo is facing mounting criticism on Wall Street. One prominent analyst predicted in December that Costolo would not last another year on the job.

Twitter has rolled out a string of features and improvements to make its service easier to use and entice people to spend more time with it. And the company has taken steps to expand its reach with a new program to distribute ads to other websites.

Twitter projected that first-quarter revenue would range from $440 million to $450 million. Analysts were looking for $449.7 million.

Twitter's stock has rallied roughly 10 percent the past several days following news of a string of partnerships and new products, but remains nearly below its 52-week high of $58.98.

(Reporting by Alexei Oreskovic and Peter Henderson; Editing by Richard Chang)