Twitter Sets Low Bar for 2014

NEW YORK (TheStreet) - After beating Wall Street consensus in its first quarterly earnings report as a public company, Twitter (TWTR) has set a low bar for investors to judge the company on in 2014.

Twitter said it expects $230 million to $240 million in first quarter 2014 revenue. The San Francisco-based micro-blogging company also said revenue for the full year is expected to come in at between $1.15 billion to $1.2 billion. Adjusted earnings before interest, taxes, depreciation and amortization are projected to be in the range of $150 million to $180 million.

So what should investors make of Twitter's guidance, which is appended to a fourth quarter earnings report that beat Wall Street consensus on virtually every metric?


WATCH: Twitter Posts Surprise Profit but User Growth Scares Street

It seems clear that Twitter is setting a low bar for 2014, possibly paving the way for future earnings beats or a steady rise in sentiment through the year.

For instance, Twitter's first-quarter guidance indicates the company is expecting flat overall revenue growth on a sequential basis. After all, Twitter earned $243 million in fourth quarter revenue and $220 million in advertising revenue, alone.

As users continue to join the micro-blogging network, Twitter is now guiding Wall Street to flat revenue growth next quarter. However, the first-quarter may present Twitter with many revenue opportunities that weren't present in the fourth quarter, for instance, the Superbowl and the Olympics.

That is especially the case as Twitter continues to pursue revenue opportunities such as conversation targeting, tailored audiences, conversion tracking and promoted accounts. Other efforts like Vine, a micro-video platform, Twitter Alerts, custom timelines, and the ability to send and receive photos via direct message are also geared towards improving user experiences.

On Wednesday evening, Twitter CEO Dick Costolo expressed confidence that the company's new products will drive increased revenue and rising user engagement on an earnings call with analysts.

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