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Twitter Revenue Beats Estimates Amid Increase in Monthly Users

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Twitter - Investors King
  • Twitter Revenue Beats Estimates Amid Increase in Monthly Users

Twitter Inc.’s road to a turnaround looks like it isn’t quite as rough as expected.

The company reported a decline in quarterly revenue for the first time since it went public in 2013, but sales, at $548 million, were higher than the $509 million analysts predicted. The shares surged as much as 13 percent in early trading. Before Wednesday, the stock had fallen 10 percent this year.

Another bright spot: user growth. Twitter has been trying to reverse a slowdown in the growth of its audience for its site, where people put up short posts about what’s happening. Average monthly active users reached 328 million in the first quarter, up 6 percent from the same period last year. The number of daily users has been increasing at a faster pace each quarter for the past year, Twitter reported.

The company said it plans to use that momentum, combined with better ad pricing and improved returns on investment, to convince marketers to spend more. Still, it expects revenue growth to “meaningfully lag” audience growth for the rest of the year. As Twitter struggles to define its future, it faces competitors with larger and faster-growing user bases, like Facebook Inc., Instagram and Snap Inc., which went public in the first quarter.

User growth “could be your first indicator that revenue could recover some day,” said Mark Mahaney, an analyst at RBC Capital Markets. Still, it’ll be tough, given the competition. “The investor issue is — when do things get less worse?”

After a failed process to sell itself in 2016, Twitter wants to prove it can go it alone and reach profitability by the end of this year. It has wielded the ax in pursuit of that goal. The company sold its Fabric developer services business to Google, shut down its Tellapart ad tech offering, and cut some planned ad products. First-quarter earnings, excluding some items, came in at 11 cents a share, well ahead of the 1 cent analysts estimated.

Twitter said that some of its work to improve its product, such as showing people more relevant tweets at the top of their timelines, has attracted more visitors to the service. Efforts to curb abuse and harassment have led to a decrease in reports and blocking from users, which the company described as “meaningful progress.”

Last year, Twitter embarked on a strategy to appeal to broader audiences by streaming live video on its site from sports, entertainment and news partners, including Bloomberg. The plan is working, as video ads were the fastest-growing ad unit, generating the most revenue, the company said. Still, it hasn’t been enough to accelerate overall sales.

“It’s more like the New York Times than it’s like a tech company,” said James Cakmak, an analyst at Monness Crespi Hardt & Co. Twitter competes with many other companies that want premium video content, he said. For example, Twitter was outbid by Amazon.com Inc. earlier this year for rights to Thursday night NFL games. “They can’t afford to keep up with the deep pockets that are willing to pay for that content.”

The company’s ad revenue is declining even as the overall market for digital advertising increases, and even as the site is constantly in the news because of prolific use by U.S. President Donald Trump. Trump’s tweets haven’t helped the company, Twitter has said.

“Revenue down isn’t good,” said Michael Pachter, an analyst at Wedbush Securities. “When Facebook grows by four Twitters a year, that tells you that there’s something really wrong.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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NNPC Plans Divestment Pathway For Joint Ventures Partnership

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The Nigerian National Petroleum Corporation (NNPC) has said it would outline policies to guide its joint venture partners (JVC) that wish to divest from joint ventures or the Nigerian oil and gas industry.

NNPC Group Managing Director, Mele Kyari on Monday said that Nigeria, as a key player in global energy security, was addressing its challenges, mainly fiscal, security and cost competitiveness, to stimulate investments in the oil and gas industry.

Kyari, who spoke in Lagos while delivering an address at the opening ceremony of the Nigeria Annual International Conference and Exhibition said, “NNPC, as a national oil company, is leading multiple initiatives to address this and other issues.

“As we celebrate the passage of the PIB, we have moved our focus to improve security architecture through collaboration with major stakeholders.”

According to him, the Nigerian Upstream Cost Optimisation Programme is working with operators and service contractors to challenge the cost of operations and increase profitability and growth in the industry.

“On the other hand, we are seeing a wave of divestment by oil majors operating in Nigeria. NNPC as a national oil company cannot stop partners from divesting their interest, even though it creates challenges for us in ensuring that we get the right and competent investors to take a position and add value to the assets.

“The NNPC will ensure that Nigeria’s national strategic interest is safeguarded by developing a comprehensive divestment policy that will provide clear guidelines and criteria for divestment of partners’ interest,” Kyari said.

He said the corporation would make clear distinctions between divestment of shares and operatorship agreements under various joint operating agreements while leveraging its rights of pre-emption and evaluating the operational competence and tract records of new partners.

Kyari said in order to sustain a prosperous business environment, particular attention would be paid to abandonment and relinquishment costs, severance of operator staff, third party contract liabilities, competency of the buyer, and post purchased technical, operational and financial capabilities.

He said the NNPC would declare its first dividend to Nigerians as it prepares to release its 2020 financial statements in the third quarter of this year.

The local unit of the Royal Dutch Shell had in May said that its onshore oil portfolio in Nigeria was ‘no longer compatible with its strategic ambitions.

“We have reduced the total number of licenses in onshore Nigeria by half. But unfortunately, our remaining onshore operations continue to be subject to sabotage and theft,” Chief Executive Officer, Ben van Beurden, told investors at the company’s AGM.

Early this year, Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited concluded the sale of their combined 45 percent interest in Oil Mining Lease 17 and related assets in the Eastern Niger Delta to TNOG Oil and Gas Limited.

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Petrol Subsidy Likely to Gulp N2T This Year –Rainoil GMD

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petrol scarcity Nigeria

Nigeria may end up spending N2 trillion on petrol subsidy this year if the current situation persists, the Group Managing Director, Rainoil Limited, Dr Gabriel Ogbechie, has said.

Ogbechie said this on Sunday at the Nigeria History Series of the Centre for Values in Leadership, themed ‘Indigenous participation in the downstream oil and gas sector’ moderated by Prof. Pat Utomi.

While lamenting the lack of deregulation in the downstream sector, he said the government was spending about N8m daily on petrol subsidy.

He described the sector as highly regulated, saying, “I wonder if there is any other sector of the economy that is as regulated as the downstream.”

He said, “The biggest elephant in the room today as far as the downstream is concerned is the failure, so to speak, of the government to deregulate the downstream – fixing the price at which petroleum products are sold, I believe, is very seriously harmful to this economy.”

According to him, the landing cost of the petrol imported into the country is about N300 per litre, based on the current naira-dollar exchange rate.

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Sirius Petroleum and Baker Hughes Collaborate on OML 65 Drilling in Nigeria

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Sirius Petroleum, the Africa-focused oil and gas production and development company, has signed a memorandum of understanding with Baker Hughes. The MoU names Baker Hughes as the approved service provider for Phase 1 of the Approved Work Program (AWP) of the OML 65 permit, a large onshore block in the western Niger Delta, Nigeria. Baker Hughes will provide a range of drilling and related services at a mutually agreed upon pricing structure to deliver the initial nine-well program.

Sirius has signed various legal agreements with COPDC, a Nigerian joint venture, to implement this program. COPDC has signed a Financial and Technical Services Agreement (FTSA) with the Nigerian Petroleum Development Company (NPDC) for the development and production of petroleum reserves and resources on OML 65. The FTSA includes an AWP which provides for development in three phases of the block. and Sirius has entered into an agreement with the joint venture to provide financing and technical services for the execution of the PTA.

The joint venture will initially focus on the redevelopment of the Abura field, involving the drilling and completion of up to nine development wells, intended to produce the remaining 2P reserves of 16.2 Mbbl, as certified by Gaffney Cline and Associates (GCA) in a CPR dated June 2021.

Commenting, Toks Azeez, Sales & Commercial Executive of Baker Hughes, said: “We are extremely happy to have been selected for this project with Sirius and their JV partners. This project represents an important step towards providing our world-class integrated well-service solutions in one of the most prolific fields in the Niger Delta. Baker Hughes’ technological efficiency and execution excellence will help Sirius improve its profitability and competitiveness in the energy market.”

Bobo Kuti, CEO of Sirius, commented: “We are delighted to have secured the services of one of the world’s leading energy technology companies to work with our joint venture team to deliver the approved work program on the block. OML 65. We look forward to building a long and mutually beneficial partnership with Baker Hughes.”

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