Twitter plunges as much as 12% on light guidance

Twitter delivered quarterly earnings and revenue that topped analysts' expectations on Tuesday. But light guidance sent shares tumbling in after hours.

The social media company posted third-quarter earnings of 10 cents per share on $569 million in revenue. Wall Street had expected the company to deliver quarterly earnings per share of 5 cents on $560 million in revenue, according to consensus estimates from Thomson Reuters.

Shares fell as much as 12 percent in extended-hours trade.

Average monthly active users (MAUs) — a key measure of growth for Twitter — came in at 307 million for the quarter, a gain of only 3 million from the previous quarter. The metric did not include users who sign up for the platform through text message. MAUs were up 8 percent year over year.

"We continued to see strong financial performance this quarter, as well as meaningful progress across our three areas of focus: ensuring more disciplined execution, simplifying our services and better communicating the value of our platform," CEO Jack Dorsey said in a statement.

"We've simplified our road map and organization around a few big bets across Twitter, Periscope and Vine that we believe represent our largest opportunities for growth."

On the conference call, Dorsey added, "You go to Twitter to say something to the world and you reach the world."

Advertising revenue came in at $513 million, beating StreetAccount estimates of $503.3 million. That is a gain of 60 percent in the year-over-year period.

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Twitter's guidance for the fourth-quarter came in lower than expected. Revenue is projected to be in the range of $695 million to $710 million, the company said. Analysts had expected revenue of $741.8 million, according to StreetAccount.

"They didn't tank the quarter, they tanked guidance. That really is the story here," finance columnist Mike Santoli said Tuesday on CNBC's "Closing Bell." "The trajectory's just not what the Street needs to see. No acceleration, and I guess, really, investors are not in a position to see this management as intentionally lowballing."

It's been a tumultuous time for the social media company in 2015. In June, CEO Dick Costolo announced he was stepping down and would be replaced, on an interim basis, by Twitter co-founder Jack Dorsey. Earlier this month, Dorsey was named the permanent CEO. He is also the head of fast-growing mobile payments company Square, potentially setting up conflicts of interest for the co-founder of both companies.

Tuesday's results are the first for the company since Dorsey claimed the post. The light guidance could be a sign that his turnaround strategy may take more time to bear fruit.

"I think there is a precedent for a tech CEO to be running two companies at once, but I do agree it's a tall order," Michael Graham of Canaccord Genuity told "Closing Bell." "He's going to be working some long hours here coming up. I imagine sometime in the next year or so, they'll come up with another solution for one of those companies."

Also this month, the company announced that it was cutting about 336 jobs or 8 percent of its global workforce.

Shares of Twitter have fallen about 36 percent in the last 12 months.

— Reuters contributed to this report.