NEW YORK (TheStreet) --Twitter (TWTR) - Get Report posted better-than-anticipated 2016 third-quarter results before the market open on Thursday. The social media site reported earnings of 13 cents per share on revenue of $616 million. Analysts were expecting earnings of 9 cents per share on revenue of $605.8 million.
Despite the earnings beat, Twitter announced this morning that it will be cutting 9% of its workforce in a restructuring effort focused on reorganizing the company's sales, partnerships and marketing efforts.
"They're taking a hard look at; we have a lot of things, we have a lot of departments and areas we are pursuing, and not all of them are working. In fact, I would argue most of them are not working so, you have to cut staff," Recode managing editor Ed Lee said during Thursday morning's "Squawk Box" on CNBC.
Additionally, Lee pointed to the stagnate growth of the company during the quarter. "Only 4 million new monthly active users in the quarter, that's not great," he noted.
Twitter was able to beat on expectations only because the bar was set low in terms of what the company can do, he added.
"The video stuff they are doing with the NFL, all the chatter around the election and everything else hasn't really added," Lee said.
Twitter stock is higher in pre-market trading today.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
The team rates Twitter as a Hold with a ratings score of C-. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, the team finds that the stock has had a generally disappointing performance in the past year.
You can view the full analysis from the report here: TWTR