Twitter earnings leaked via tweets, sales disappoint

Twitter earnings leaked via tweets, sales disappoint

The microblogging site inadvertently released its first-quarter financials after posting on its own investor relations Web page. Shares fell after sales missed estimates and Twitter lowered its full-year guidance.

Twitter's headquarters in San Francisco.James Martin/CNET

Oh, the power of tweets.

Twitter experienced firsthand Tuesday how its microblogging service can disseminate news faster than just about any other news organization when one of its users tweeted the company's first-quarter sales and profit about a half hour before the results were scheduled to be announced.

Selerity, a New York market intelligence firm, said in a tweet it found the results on Twitter's own investor relations page. "Today's $TWTR earnings release was sourced from Twitter's Investor Relations website https://investor.twitterinc.com . No leak. No hack," Selerity tweeted.

Twitter's Investor Relations group said in two tweets that it asked the New York Stock Exchange to halt trading on its shares after discovering the earnings numbers had been published. "We are investigating the source of the leak," the company said.

Twitter reported sales of $436 million, missing analysts estimates of $457 million. Profit in the first quarter was 7 cents a share. Analysts had estimated 5 cents a share. For the current quarter, Twitter projects revenue between $470 million to $485 million. Analysts had estimated sales of $537.3 million.

The shares fell more than 18 percent on Tuesday on the early news that it had lowered its full-year 2015 financial expectations.

Twitter CEO Dick Costolo's job may once again be jeopardy. Investors had been calling for him to step down as the company struggles to deliver sustainable growth in sales and profits.

"Revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products," Costolo said in a statement Tuesday. "It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future.

"We remain confident in our strategy and in Twitter's long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services," he said.

The social network said it now has 302 million monthly active users, meeting analysts' estimates, up from 288 million users at the end of the previous quarter.Costolo has been working the past few months to expand the site's appeal beyond the hipsters, geeks and newshounds who comprise much of the microblogging service's user base. To do that, he's made it easier for new users to sign on and build followers, added video-sharing capabilities, and reorganized the home page to make it more inviting and easier to search. He's also taken steps to counter abusive behavior. At the same time, the company has added new tools for advertisers, such as promoted tweets and targeted advertising.

Twitter also said Tuesday that is has acquired TellApart, a marketing technology company that lets advertisers target consumers as they move across apps and devices. Costolo is an investor in the company; terms of the deal were not disclosed. The company also announced a deal with Google that lets Twitter's advertising customers manage their ad campaigns through Google's DoubleClick Bid Manager. Twitter gets nearly all of its revenue from ad sales.

Twitter is working to find new ways to reach casual users while encouraging existing users to spend more time on the site or in the app. In the past few months, the company added the ability to forward tweets, send messages to groups and receive messages from strangers, without first requiring them to follow each other. Its revamped home page now shows visitors trending topics, even if they don't have accounts, with the goal of enticing them of signing up for the service. And its new Periscope app lets users stream and edit live video.

Additionally, Twitter has made it easier for media companies to include tweets in their stories and broadcasts, creating curated lists of suggested feeds for new users. All of these efforts are designed to attract more advertisers to Twitter and away from rivals such as Facebook.