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Twitter shares surge after reporting first profitable quarter

Queenie Wong, The Mercury News on

Published in Business News

SAN FRANCISCO -- Twitter on Thursday reported its first profitable quarter and a growth in ad sales, but the tech firm is still struggling to attract new users.

For Twitter, there's still more work to do.

"We're proud of the steady progress we made in 2017 and we're confident in our path ahead," said Twitter CEO and co-founder Jack Dorsey in a conference call. "We have significant opportunity ahead of us to put Twitter in as many people's hands as possible and make the service more relevant to more people every single day."

Twitter's stock at one point rose more than 23 percent in pre-market trading to $33.28 per share after the company released its financial results.

The company, which has been slashing expenses, turned a profit of $91 million, or 12 cents per share, for the first time, beating Wall Street's expectations.

But the San Francisco tech firm continues to face a number of challenges including a string of executive departures. Twitter, which is known for its real-time nature, also competes with larger tech firms including Facebook and Google for ad dollars.

--Sponsored Video--

"At best we can look at the most recent period's results as marking an important milestone in the company's turnaround, perhaps bringing the future forward by a quarter," wrote Brian Wieser, an analyst for Pivotal Research Group, in a note. "While we can see this as positive for sentiment and investor confidence, it's hardly a game-changer for Twitter."

In January, Twitter COO Anthony Noto announced he was leaving to become the chief executive of SoFi. Some analysts and investors raised concerns that Noto's departure could hinder the company's turnaround efforts.

Dorsey started off the conference call by thanking Noto for his contributions and said that executives from his team will be taking on the roles of the departing COO.

"We haven't skipped a beat and we're really excited about looking at this (organization) in a new way but we have a lot of strength around the table and a lot of confidence to continue the strategy," Dorsey said.

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