Twitter (NYSE:TWTR) tumbled in premarket trades after the microblogging company issued downbeat revenue guidance and reported slower user growth than anticipated.
Shares retreated as much as 11% to $31.30 as of 8:36 a.m. in New York.
Twitter forecast fourth-quarter revenue of $695mln and $710mln, according to a statement from the San Francisco, California-based company late on Tuesday. That was well below analysts' average estimate of $739.7mln according to Capital IQ.
The outlook indicated that more time is needed for a turnaround as social media competition intensifies from the likes of Facebook’s (NASDAQ:FB) Instagram and Messenger apps.
The forecast came even as Twitter beat third-quarter profit and revenue estimates.
The company posted third-quarter earnings of $0.10 per share on $569mln in revenue. Wall Street had expected the company to deliver quarterly earnings per share of $0.05 on $560 mln in revenue.
Average monthly active users (MAUs)—a key measure of growth for Twitter—came in at 307 million for the quarter, a gain of only 3mln from the previous quarter.
This was the company's first quarter with Jack Dorsey serving as permanent head, after his return as interim chief executive in June.
Last quarter he took a critical stance to the potential profitability of some Twitter products.
Twitter has launched several new commercial partnerships with Bigcommerce, Demandware, and Shopify.