Twitter Earnings: What to Look For

Key Takeaways

  • Analysts estimate adjusted EPS of $0.04 vs. $0.17 in Q3 FY 2019.
  • Monetizable daily active users (mDAU) is expected to rise sharply.
  • Revenue is expected to decline, but at slower pace than Q2 FY 2020.

Social media giant Twitter Inc. (TWTR) has faced two conflicting trends amid the COVID-19 pandemic. The company has seen a major spike in users as millions of people shelter at home, but the economic slowdown has caused a significant decline in advertising. Twitter depends on ads for the vast majority of its revenue and profit.

Investors will pay close attention to these dueling trends when Twitter reports earnings on October 29 for Q3 FY 2020. Analyst expect a steep drop in adjusted earnings per share (EPS) compared to the same period a year earlier after losing money in Q2 FY 2020. Revenue is expected to decline for the second straight quarter year-over year (YOY), though at a slower pace.

Investors may get promising news from a key Twitter metric, which is monetizable daily active users (mDAU). The metric is expected to post its best quarterly growth in more than three years. mDAU is the company's primary measure of user traffic on its main platform, and is closely watched as an indication of Twitter's capacity to grow its advertising revenue. 

Since plunging with the broader market to a low in March of 2020, Twitter's shares have risen by more than 120%, experiencing wild swings along the way. Twitter has outperformed the broader stock market, posting a 1-year trailing total return of 63.0% compared to 11.9% for the S&P 500.

Twitter's stock pulled back after reporting on July 23 that Q2 FY 2020 earnings and revenue badly missed expectations. It posted its first quarterly loss in three years. After the report, the stocks drifted down and then traded essentially sideways for the next two months before resuming its upward trajectory in mid-September.

Twitter had posted YOY three straight quarters of declines in adjusted EPS before the loss in Q2. When it comes to Twitter's performance in Q3, prior periods have trended downward, from adjusted EPS of $0.21 in Q3 FY 2018 to $0.17 in Q3 FY 2019. Now, analysts estimate a 75.5% decline to $0.04 for Q3 FY 2020.

The company's revenue performance also has been poor in recent quarters. In Q2 FY 2020, Twitter's revenue fell 18.8%, its first quarterly decline since Q3 FY 2017. Consensus estimates predict another YOY decline of 5.9% in Q3 FY 2020, although by a smaller amount than Q2.

Twitter Key Metrics
  Estimate for Q3 FY 2020 Actual for Q3 FY 2019 Actual for Q3 FY 2018
Adjusted Earnings Per Share ($) 0.04 0.17 0.21
Revenue ($M) 775.4 823.7 758.1
Monetizable Daily Active Users (M) 196.3 145.0 124.0

Source: Visible Alpha

As indicated, a key metric to watch at Twitter is monetizable daily active users (mDAU). This non-GAAP measure is intended to capture the “vetted” users of the platform, after filtering out illegitimate users such as fake accounts, bots, accounts linked to spam, multiple accounts linked to the same user, and so on. Twitter’s mDAU metric is watched closely by advertisers, since it serves as a proxy for the size of the audience that their ads can reach through the platform. Although mDAU may provide a more accurate picture of the company’s user base, this also makes it difficult to compare Twitter’s performance to competitors.

Twitter's stock gains in recent months may be due in part to acceleration in Twitter's growth of mDAUs. That pace has sped up in FY 2020 even though the company has posted YOY gains in mDAUs each of at least the past 13 quarters, In Q1 FY 2020, Twitter's 23.9% increase in mDAUs was the biggest quarterly jump in about three years. Then in Q2 of this fiscal year, the company beat expectations when it reported bigger YOY mDAU gains of 33.8%. Now, analysts predict a 35.4% increase in mDAUs for Q3 FY 2020.

Article Sources

  1. Wall Street Journal. "Twitter Adds More Users, but Revenue and Profit Fall." Accessed Oct. 26, 2020.

  2. Twitter Inc. "Twitter Third Quarter 2020 Earnings Conference Call." Accessed Oct. 26, 2020.

  3. Visible Alpha. “Visible Alpha.” Accessed Oct. 26, 2020.

  4. Twitter Inc. "Twitter Announces First Quarter 2020 Results," Page 3. Accessed Oct. 26, 2020.

  5. Wall Street Journal. "Twitter Adds More Users, but Revenue and Profit Fall." Accessed Oct. 27, 2020.

  6. Visible Alpha. “Visible Alpha.” Accessed Oct. 26, 2020.

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What to Expect When American Express, Coca-Cola, Intel, Verizon and More Report This Week

Nearly a third of the Dow Jones industrial average components are scheduled to report their latest quarterly reports this week. With the markets seemingly back on track, the fundamentals from this quarter will be important in terms of understanding where we really stand with the Dow what it could mean for the economy as a whole.

24/7 Wall St. has put together a preview of those Dow companies scheduled to report their quarterly results this week. We have included the consensus earnings estimates, as well as the stock price and trading history. Be advised that the earnings and revenue estimates may change ahead of the formal reports, and some companies may change earnings dates as well.

Travelers Companies Inc. (NYSE: TRV) will report its latest quarterly earnings before Tuesday’s open. The consensus estimates call for $3.16 in earnings per share (EPS) and $7.55 billion in revenue. Shares recently near $113, in a 52-week range of $76.99 to $142.22. The consensus target price is $121.80.

Procter & Gamble Co. (NYSE: PG) is expected to report its most recent quarterly results on Tuesday morning as well. The consensus estimates are $1.41 in EPS and revenue of $18.35 billion. Shares were trading close to $145 on Friday. The consensus price target is $141.69, and the 52-week trading range is $94.34 to $145.85.

Verizon Communications Inc. (NYSE: VZ) is expected to report its most recent quarterly results first thing on Wednesday. The consensus analyst estimates are $1.22 in EPS and revenue of $31.59 billion. Verizon stock traded above $58 on Friday. The consensus price target is $61.26, and the 52-week trading range is $48.84 to $62.22.

Coca-Cola Co. (NYSE: KO) will report its latest quarterly earnings before Thursday’s opening bell. The consensus estimates call for $0.46 in EPS and $8.35 billion in revenue. Shares were trading above $50 apiece late in the week. The 52-week range is $36.27 to $60.13, and the consensus analyst target is $54.50.

Dow Inc. (NYSE: DOW) will post its quarterly earnings early on Thursday. The consensus estimates are calling for a net loss of $0.33 per share and $9.52 billion in revenue. Shares changed hands below $50 late on Friday, in a 52-week range of $21.95 to $56.25. The analysts’ consensus target is just $48.39.

Intel Corp. (NASDAQ: INTC) will share its third-quarter results late Thursday. The analysts’ consensus forecast is EPS of $1.10 on $18.22 billion in revenue. Shares were trading just below $55. The consensus price target is $56.59, and the stock has a 52-week range of $43.63 to $69.29.

And American Express Co. (NYSE: AXP) is scheduled to report its third-quarter earnings Friday morning. The consensus estimates call for $1.33 in EPS and revenue of $8.66 billion. Shares were changing hands just above $105. The mean price target is $106.04, and the 52-week trading range is $67.00 to $138.13.

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World News

What crisis? Beers flow, miners toast boom at Diggers & Dealers knees-up

By Hamish Hastie

The Diggers & Dealers 2020 gala dinner on Wednesday night.Credit:Bill Stokes/Diggers & Dealers

The pubs in Kalgoorlie were heaving with thirsty brokers, analysts and executives this week as the mining fraternity gathered for the industry's biggest annual event: the Diggers and Dealers conference. But while it might have been hard to tell, this year's edition of the notoriously debauched conference in the West Australian outpost took place against a highly unusual backdrop: the mining business is once again booming despite a global pandemic and worldwide recession.

Over the past eight months the global economy has soured significantly with the COVID-19 threat forcing many major cities into lockdown. But at Diggers and Dealers, that felt like a distant nightmare as optimism in the mining sector for virtually every mineral commodity reached levels unseen for more than a decade.

Attendance was only down slightly due to travel restrictions, the pubs were full and the drinking was heavy. Even the scantily clad "skimpy" barmaids were present (although the windows of pubs they appeared in were blacked out with plastic sheets so they couldn't be seen by the outside world).

The Diggers and Dealers forum was started in 1992 with the express aim of connecting miners with money for expansion and to drive mergers and acquisitions. Much of the activity, infamously, takes place away from the conference itself in various watering holes around the frontier mining town.

At any one moment there could have been billions of dollars of net worth crowding the front bars of the iconic Exchange and Palace Hotels.

The more dignified formal event was held two months later than usual from Monday to Wednesday at the Goldfields Art Centre in the heart of the historic gold mining town and this year’s forum attracted about 1950 delegates.

That was about 450 less than last year largely due to interstate and international travel restrictions. Yet aside from temperature checks and an abundance of hand sanitiser the pandemic was a mere afterthought.

As one attendee put it: “It’s about the diggers, and it’s about the dealers” and those miners celebrating a good year were treated to a rockstar reception.

Golden days

The headline act of this year’s forum was gold, the price of which has been surging. Northern Star Resources chairman Bill Beament and Saracen Minerals managing director Raleigh Finlayson presented on Monday morning less than a week after they announced a blockbuster $16 billion merger between their two gold mining companies.

That announcement earned them the forum’s ‘dealers award’ and prompted a consistent theme of consolidation over the three days. The gold price hit a record $US2075 ($2873) an ounce in August and has remained around $US1900 ever since.

The Super Pit gold mine in Kalgoorlie is jointly run by Saracen and Northern Star.Credit:Carla Gottgens

Beament said he expected the price to ‘kick’ again as the COVID health response transitions into an economic response. Other miners, such as Gold Road Resources boss Duncan Gibbs, predicted a strengthening Aussie dollar would “take some of the juice” out of any potential price jump.

One of the hottest bits of property being shopped around was ASX-listed IGO’s 30 per cent stake in AngloGold Ashanti’s Tropicana mine 330 kilometres north east of Kalgoorlie. IGO is conducting a review of its stake and has already received unsolicited offers.

Smaller miners and exploration-focused companies showing promising results were also lauded. De Grey Mining’s share price has rocketed 2440 per cent since January to $1.27 after its Hemi discovery south of Port Hedland started shaping up as one of the biggest in recent memory.

Iron-clad relations

Gold is exciting but iron ore, the nation’s biggest export and a key source of tax revenue, is much more important. Thanks to supply disruptions in Brazil and sustained demand from China, the sector is defying the global COVID downturn with prices hovering around $US120 a tonne, sending share prices of major miners such as Fortescue Metals and the fortunes of billionaires, such as Andrew Forrest and Gina Rinehart, soaring.

Producers were quick to dismiss fears there was any danger of it becoming the next commodity to fall within the crosshairs of China amid growing Sino-Australian trade tensions after news it had banned the import of Australian thermal coal.

“I don't think we can become complacent about it but there is a very strong trading relationship that has been built over many decades,” Fortescue Metals Group CEO Elizabeth Gaines said.

Junior Kimberley iron ore producer Mount Gibson Iron chief executive Peter Kerr said his business had not seen any blowback from the political tensions and he was confident demand would remain strong.

“The fundamentals of coal supply and iron ore supply are quite strong … with iron ore, China needs seaborne iron ore [because] the quantity of iron ore within China itself is not major,” he said.

I'd have to say I think we are probably far closer to those matters than perhaps you would be if you were based somewhere else in the world.

Tensions started bubbling over into agriculture and mining commodities after Prime Minister Scott Morrison called for an independent international inquiry into the COVID-19 outbreak that began in China. On Friday, Chinese cotton mills were told to stop using Australian cotton.

FMG’s biggest customers are Chinese and when asked about whether there should be an inquiry, Gaines said there was merit in looking at how many countries responded to the pandemic, not just China.

“A review that looks at how different countries have dealt with it and where’s best practice makes a lot of sense but that's on a global basis I don't think it's specific to one particular area,” she said.

Fortescue Metals Group chief executive Elizabeth Gaines speaking at Kalgoorlie's Diggers and Dealers conference on Tuesday.Credit:Hamish Hastie

In his keynote speech to the forum on Monday WA Premier Mark McGowan levelled a thinly veiled swipe at the Morrison government for its handling of the China relationship. "We should always protect our interests, that isn't in question, but is it in our interest to be reckless with trading relationships that fund the nation?” he said.

Rio the villain

Rio Tinto's shocking destruction of ancient caves at Juukan Gorge was another key topic of discussion. Miners are being forced to rethink how they deal with the traditional owners of the lands on which they operate. Many were happy to throw the iron ore giant under the bus for the scandal.

When asked whether Fortescue executives know about major Indigenous heritage sites that could face destruction, Gaines spruiked the fact that the company calls Perth home. "We report to our board regularly on heritage management, I'm across it," she said.

"I'd have to say I think we are probably far closer to those matters than perhaps you would be if you were based somewhere else in the world."

Rio Tinto’s board lost three executives over the Juukan Gorge destruction including its chief executive Jean-Sebastien Jacques. One of the biggest criticisms was that top executives and board members are London-based and had little knowledge of the Pilbara where Rio generated most of its income.

Major changes to Aboriginal heritage laws are being discussed and the state government is seeking feedback on a bill that would remove the process Rio Tinto used to gain legal approval to destroy the gorge.

IGO chief executive and Association of Mining and Exploration Companies president Peter Bradford said Rio's actions had shaken up that consultation. “The ability to get an industry view in shaping that legislation to make sure it is a better outcome for all parties has been made more challenging by what’s happened at Juukan Gorge,” he said.

The Musk effect

The long-promised electric vehicle boom might actually be around the corner if the nickel producers presenting at the conference were to be believed.

Those companies were buoyed by recent comments by Tesla founder Elon Musk for nickel miners to produce good quality, sustainable nickel and lots of it.

“His call for nickel miners to grow, and to grow quickly, offers real evidence of the place that nickel has as a strategic battery metal going forward," BHP's Nickel West president Eddy Haegel said.

While COVID-19's presence wasn't physically being felt the hard border that has helped keep it out of WA was a hot topic among presenting companies, some of whom presented via video link because they couldn't enter the state.

As the first-ever sitting politician to deliver a Diggers and Dealers speech (a fact that raised eyebrows amongst delegates) McGowan's keynote speech resembled an election campaign launch and he engaged in heavy promotion of the border closure as the saviour of the industry.

Some companies agreed while others lamented the growing impact it was having on their business and their ability to hire workers.

Saracen's Finlayson said he was happy with the borders being shut.

WA Premier Mark McGowan at the 2020 Diggers & Dealers in Kalgoorlie.Credit:Bill Stokes/Diggers & Dealers

"As much as what you say it would be great to get back and talk to shareholders again, the flipside is if we open up too soon and start getting cases or, God forbid, we start getting cases in a regional place like Kalgoorlie or one of our mine sites we will very quickly regret it,” he said.

Roy Hill chief executive Barry Fitzgerald said he hoped as COVID-19 test result times shrunk the border policy could be revisited.

Evolution Mining chairman Jake Klein, who fronted a press conference via video call, said the sooner the borders were lifted, the better.

WA Energy Minister Bill Johnston defended the policy.

"In Western Australia, you're allowed to have a beer standing up in the pub, you [can't] do that in Sydney. In Western Australia you can go to a live music concert, you can't do that in Melbourne," he said.

At Diggers and Dealers the industry was standing up with beer in hand, toasting some of the most promising conditions since that last mining boom.

"Kalgoorlie and the Goldfields have got a real buzz about them at the moment, Chamber of Minerals and Energy chief executive Paul Everingham said.

"Gold is going well … nickel is back in the game, rare earths are bouncing along, battery minerals are starting to come back and of course there's iron ore.

"It's the most optimistic I've seen it in past four or five years," he said.

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World News

What you need to know about Tencent

Hong Kong (CNN Business)Tencent has pulled the plug on its wildly popular video game PlayerUnknown’s Battlegrounds in China, a likely victim of government restrictions on gaming.

A message posted on the game’s official social media account said the testing period for PlayerUnknown’s Battlegrounds (PUBG) ended on Wednesday.
It gave no further information about PUBG, instead directing users to download Game for Peace, a new multiplayer battle game.

    PUBG has been a huge global success for Tencent (TCEHY) — users have spent more than $320 million on the game, according to research firm Sensor Tower. And news of its demise in China caused a frenzy on social media — the hashtag “PUBG is gone” was read more than 550 million times.
    China opens the door to Nintendo's Switch and Super Mario
    But PUBG has not made Tencent any money in the tech company’s home country and the world’s largest gaming market.

    That’s because Tencent hasn’t been able to sell subscriptions or in-game purchases for PUBG and some other popular titles in China for months following a regulatory crackdown by officials.
    Chinese regulators said they wanted to control the number of new online games and limit game time for minors. The measures are part of a government effort to reduce nearsightedness in children and adolescents.
    Tencent started getting approvals for a few games in January. The decision to pull PUBG suggests that the company failed to get the green light to monetize one of its most valuable titles.
    Tencent did not respond to a request for comment.

    Playerunknown's Battlegrounds has pulled in $320 million for Tencent outside China.
    Karen Chan, an analyst with Jefferies, said the “earlier-than-expected launch” of Game for Peace bodes well for Tencent, which received the official go ahead to make money from the new game last month.
    Most of PUBG’s Chinese users will likely migrate to Game of Peace, and that should drive mobile game growth later this year, Chan wrote in a note to clients.
    Tencent’s stock rose 2% in Hong Kong on Wednesday, outperforming the broader market. Shares in the world’s largest gaming company are up 23% for the year, but still down 19% from an all time high in January 2018.
    Its new game is similar to PUBG, but less violent. It’s also “a tribute to the People’s Liberation Army Air Force … set under the backdrop of anti-terrorism military training,” Chan said.
    Still, some fans were unhappy about the demise of PUBG, a game where users took on the roles of special operations forces.

      “Who wants to be some bullsh** player, I want to be a special op!” one user, who goes by the handle ‘the girl who carries boxes,’ wrote on Chinese social media.
      “If you’re gonna change the name, change it to something that sounds good, like what is ‘Game for Peace’?” user Zhang Zhongru wrote.
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      World News

      Montana mail-in voting: What to know

      What is the difference between mail-in voting and absentee voting?

      David Spunt takes a look at the differences between mail-in voting and absentee voting

      As the United States prepares to hold a presidential election in the midst of a deadly pandemic, many states have adjusted to minimize in-person contact at the polls, including Montana.

      Gov. Steve Bullock, a Democrat, on Aug. 6 announced that he would allow counties in his state to opt into a universal mail-in voting system, meaning all active voters in counties that choose to participate will be sent ballots without needing to request them. Bullock made a similar move in March ahead of the state's primary elections.

      "I am in agreement with our bipartisan election administrators – who are the ones on the ground with the first-hand knowledge of how to successfully conduct an election – that we must protect Montanans’ right to vote, while protecting the public’s health," Bullock said in an August statement.


      He added: "Locally elected officials best understand the voting needs of their communities, and taking this action now ensures they will have the time to make the right decisions for their localities. With this approach we can protect that fundamental right to vote, while easing crowding and pressure on voting on Election Day."

      Bullock's order instructed counties that opt into the universal mail-in option to send their ballots on Oct. 9. The order will expire immediately after the 2020 general election, meaning any future elections, without a similar emergency declaration or a change in law, will not be universal mail-in.

      In Montana, mail ballots are required to be received by 8 p.m. on Election Day. Voters can track their ballots online. The Montana Secretary of State says that voters should contact their county election offices to determine exactly what voting options are available.


      Counties that opt for universal mail-in voting are still permitted to hold in-person voting at polling places, according to Bullock's order, and are told to expand early voting opportunities as well.

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