In a packed Wednesday with a handful of earnings announcements, investors will pay close attention to results from social media company Twitter (TWTR) and ride-sharing giant Uber (UBER).
Twitter is set to deliver fourth-quarter earnings before the market open. User growth, ad revenue growth and monetization efforts will be in focus. During the quarter, Twitter is expected to report total monetizable daily active users (mDAU) of 147 million and 31 million U.S. mDAUs. Wall Street predicts that advertising revenue grew 9% from last year to $863 million.
RBC analyst Mark Mahaney said that according to RBC’s 7th social media user survey, Twitter posted modestly positive results. “Penetration levels remained very consistent with 43% of respondents using the service, in line with the historical average. Past and Future Intention were also largely stable,” he said in a note Feb. 3. “The most bullish datapoint for Twitter was the rise in Engagement to a record-high 49% implied DAU/MAU ratio (above historical range of 41% to 44%). We view this as a positive sign that investments in improving the health of the platform may be paying dividends in the form of higher engagement.”
Analysts polled by Bloomberg are expecting Twitter to report adjusted earnings of 28 cents per share on $994.49 million in revenue. The options market is implying about a 12.7% move in either direction for the stock following the results.
After the market close, Uber will release its fourth quarter financial results. Investors will be hyper focused on gross bookings, ride segment results, Uber Eats segment results and Trips.
Wall Street expects gross bookings of $18 billion and 1.906 billion Trips during the fourth quarter. Outlook for the first quarter and 2020 will also be critical.
According to Cowen, “Our monthly U.S. survey suggests that Uber continues to be well-positioned to drive increased user penetration over the [long term]. For instance, 25% of A18-24 respondents were Uber Monthly Active Users (MAUs) in 4Q19 (on avg.) up from 20% in 4Q18,” analyst John Blackledge wrote in a note to clients Jan. 30. “Per our survey data, on average in 4Q19, ~12% of Uber riders were heavy users, using the service 1-2 times per week or more. While we are still in the early phases of usage for these services, in our view, in some instances, these services could become car replacement alternatives.”
Cowen’s survey found Uber Eats saw robust penetration during Q4, along with rivals such as DoorDash. “Online food delivery service usage trends tend to skew toward younger demographics; however the older demos continue to close the gap,” Blackledge said. “On average in 4Q19, 19% of A18-24 respondents were Uber Eats MAUs, up from 16% a year ago. The cohort with the largest y/y increase in MAU penetration was respondents age 45-54, which rose from 5% in 4Q18 to 8% in 4Q19.”
Analysts surveyed by Bloomberg expect Uber to report an adjusted loss of 55 cents per share on $3.7 billion in revenue. Shares of the company soared 25% so far this year, while the broader market rose 3% during the same time period.
Other notable earnings reports scheduled for Thursday include the following: Intercontinental Exchange (ICE), Dunkin’ Brands (DNKN), Kellogg (K), Tyson Foods (TSN), Yum! Brands (YUM), Spirit Airlines (SAVE), Cigna (CI) before market open; Wynn Resorts (WYNN) after market close.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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