By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Big losses from Twitter Inc. and
eBay Inc. dragged on the tech sector Wednesday as investors turned
against the Internet bellwethers due to certain aspects of concern
in the those companies' quarterly earnings reports.
Twitter (TWTR) shares fell more than 12%, to $37.49 after the
social-networking leader reported late Tuesday that its
first-quarter revenue nearly doubled from a year ago, to $250.5
million. Twitter also said it broke even on a per-share basis,
excluding one-time items. Analysts surveyed by FactSet had forecast
Twitter to lose 3 cents a share on $241.5 million in sales.
However, it was Twitter's user-growth rates that hit the
company's stock price Wednesday. Twitter said it had 255 million
average monthly active users at the end of March, while analysts
had been forecasting 257 million such users.
EBay (EBAY) also took it on the chin, as its shares fell 6% to
$51.29. On Tuesday, the e-commerce leader reported first-quarter
earnings, excluding one-time items, of 70 cents a share on revenue
of $4.26 billion. Those results topped the forecasts of analysts,
who were looking for eBay to earn 67 cents a share on $4.22 billion
sales.
However, eBay's second-quarter outlook failed to inspire the
market. And even though eBay's PayPal unit performed well, more
concerns were raised about growth in the company's marketplaces
business and in eBay's overall U.S. operations.
"While PayPal's performance was strong across the board,
marketplaces results were light, particularly [with] margins and
U.S. gross marketplace value growth," said Bernstein Research
analyst Carlos Kirjner.
Other declines came from Yelp Inc. (YELP), which was off by 4.5%
in advance of its first-quarter results, due after the close of
trading, as well as Yahoo Inc. (YHOO), Pandora Media Inc. (P) and
Netflix Inc. (NFLX).
Advancers included Apple Inc. (AAPL), Amazon.com Inc. (AMZN) and
IBM Corp. (IBM).
The Nasdaq Composite Index (RIXF) looked to be headed for an
erratic market session, as it remained down by 6 points at 4,096.
The Philadelphia Semiconductor Index (SOX) managed to edge into
positive territory.
More tech news from MarketWatch:
Twitter's dilemma: "User growth a canary"
Why teens are rebelling against Facebook
Allianz says look at Internet, biotech for next Apple
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