Why Twitter, Inc. Stock Is Trading Lower

What happened

Shares of social network Twitter (NYSE: TWTR) fell as much as 11.7% on Thursday, and are down about 10% at the time of this writing. The pullback in the company's stock price follows the company's underwhelming fourth-quarter earnings report.

So what

For its fourth quarter, Twitter said its revenue was $717 million, up just 1% year over year. Furthermore, the company reported a net loss of $167 million, or $0.23 per share. Non-GAAP net income and EPS was $119 million and $0.16 per share.

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Likely serving as a key reason for the market's pessimistic response to Twitter's results on Thursday, analysts were expecting significantly higher revenue. On average, they expectedfourth-quarter revenue of about $740 million.User growth was also unimpressive, with Twitter's monthly active users increasing just 0.6% sequentially, down from 1.3% sequential growth in Q3.

Now what

Twitter didn't provide much optimism for 2017, opting not to provide revenue guidance. The company also said it expects advertising revenue growth to lag audience growth throughout the year. It noted, "Advertising revenue growth may be further impacted by escalating competition for digital ad spending and the re evaluation of our revenue product feature portfolio, which could result in the de-emphasis of certain product features."

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Daniel Sparks has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.