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Twitter soars on surprisingly strong numbers

SAN FRANCISCO--Twitter shares shot higher by some 30 percent Tuesday after its quarterly report showed surprisingly strong revenue and user growth, despite a widening loss.

The popular one-to-many messaging service said its quarterly loss widened to US$145 million from a US$42 million loss a year ago.

But revenue more than doubled from a year ago US$312 million in the three months that ended June 30, with the number of monthly active users hitting 271 million, up 24 percent year-over-year.

The “adjusted” results which exclude certain expenses and stock compensation showed a modest profit of US$15 million, better than expected.

That along with the rise in use evidently bolstered confidence of investors who sent the stock soaring about 30 percent in after-market trades to US$49.61.

“They seem to be doing the right thing,” said Gartner vice president of mobile computing Ken Dulaney.

“It is well-advertised on TV. Companies put Twitter IDs on pitches. It is kind of ingrained in what we do.”

And, the analyst noted, there is plenty of room for Twitter to evolve, perhaps into a more extensive real-time news service tightly linked to television programming.

Twitter's loss included US$158 million in stock-based compensation.

Twitter took in US$277 million from advertising, a 129 percent increase from the same period a year earlier.

Ads served up on Internet-linked mobile devices accounted for 81 percent of that revenue in a sign that the San Francisco-based firm was tending to the business side of following users onto smartphones and tablet computers.

About a third of Twitter's revenue came from outside the United States, with International revenue climbing 168 percent to US$102 million, earnings figures showed.

“Our strong financial and operating results for the second quarter show the continued momentum of our business,” Twitter chief executive Dick Costolo said in the earnings release.

“We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter's appeal to an even broader audience.”

Helped by World Cup

Forrester analyst Nate Elliott saw the earnings numbers and user growth figures as encouraging, but only a little bit.

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