Shares of social network Twitter (NYSE:TWTR) took a hit on Thursday, falling as much as 19.9%. As of 11:00 a.m. EDT, the stock was down about 19%.
The stock's slide follows the company's worse-than-expected third-quarter results. Adding to the disappointment, Twitter's fourth-quarter revenue outlook was weaker than analysts were anticipating.
Twitter reported revenue of $824 million, up 9% year over year. This was at the low end of management's guidance range for revenue between $815 million and $875 million and below analysts' average forecast for revenue of $874 million. This revenue underperformance weighed on profitability, with the growth stock's non-GAAP (generally accepted accounting principles) earnings per share coming in at $0.17, down from $0.21 in the year-ago quarter. Analysts, on average, were expecting $0.20.
Twitter's lower-than-expected revenue growth reflected "revenue product issues and greater-than-expected advertising seasonality in July and August," management said in the company's third-quarter shareholder letter. The company said some glitches it is dealing with in its revenue products reduced year-over-year revenue growth by 3 percentage points or more -- and some of these issues are expected to impact Q4 as well.
Looking to Q4, Twitter guided for revenue to be between $940 million and $1.01 billion -- below analysts' average forecast for revenue of $1.06 billion.
"While we are taking steps to remediate these issues, we expect them to continue to weigh on the overall performance of our advertising business in the near term," said management.