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Accounting and Finance

Twitter more than doubles its sales, stock soars

Twitter more than doubled its sales in the second quarter, the company reported Tuesday, showing a strong advertising business.

Total sales were for the period ended June 30 were US$312 million, the company said, up 124 percent from the same period last year and beating analysts' expectations of $283 million, as polled by Thomson Reuters.

Twitter makes the bulk of its sales through ads placed in users' streams and made to look like tweets.

The company still hasn't turned a profit though. Twitter reported a net loss of $145 million.

Excluding share-based compensation and other adjustments, Twitter's earnings per share was $0.02, beating slightly analyst estimates of a loss of $0.01.

Twitter shares were trading at around $52 in the after market hours, up more than 30 percent from a close of $38.59.

"Our strong financial and operating results for the second quarter show the continued momentum of our business," CEO Dick Costolo said in the company's announcement.

Twitter has shown it can make money through advertising, but its ability to expand its audience has been a concern to financial analysts. The company reported having 271 million monthly active users on Tuesday, up 24 percent from the same period last year.

On a quarterly basis though, Twitter grew its users by roughly 6 percent, from 255 million reported this past April.

Facebook, one of Twitter's largest competitors, has more than 1.3 billion monthly active users.

Twitter will hold a conference call following its announcement to discuss the results. During that call, Costolo and other company executives may discuss the numbers of Twitter "nonusers" -- people who are exposed to Twitter content on other sites or screens, but who don't log in to Twitter. Twitter content was shown on screens in general, for instance, during the World Cup.

But it will be hard for Twitter to make money from nonusers. Twitter's targeted ads are served partly based on how people use its service when they're logged in, such as by how they tweet or whom they follow.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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