Twitter is expected to show another profitable quarter thanks to increasing ad sales

  • Estimated earnings per share: 12 cents, according to a Thomson Reuters consensus estimate.
  • Estimated revenue: $606.9 million, according to a Thomson Reuters consensus estimate.
  • Estimated monthly active users: 334.2 million, per a StreetAccount and FactSet estimate.
Jack Dorsey, CEO of Twitter
Lucas Jackson | Reuters
Jack Dorsey, CEO of Twitter

On the eve of Twitter next quarterly report, investors are waiting to see if the company will report its second profitable quarter in a row.

Here are the consensus estimates for the company's first-quarter earnings report on Wednesday:

  • Estimated earnings per share: 12 cents, according to a Thomson Reuters consensus estimate
  • Estimated revenue: $606.9 million, according to a Thomson Reuters consensus estimate
  • Estimated monthly active users: 334.2 million, per a StreetAccount and FactSet estimate

Increasing advertising sales should keep the company in the black. Market research firm eMarketer is projecting Twitter's advertising revenue will increase about 5 percent this year, a notable difference from when it saw revenue fall 6 percent in 2017.

"We're definitely seeing some signs of improvement," eMarketer analyst Debra Aho Williamson told CNBC.

In particular, Twitter's ad businesses in international and direct response — where users are linked to a direct action like a purchase or a website— seem to be growing, Williamson said. It's also benefiting from increasing digital advertising budgets, as well as more companies looking for digital video advertising opportunities.

"Constructive advertiser conversations, improving user growth, and positive revisions make a more compelling risk/reward," Morgan Stanley analyst Brian Nowak wrote in a note. "Recent advertiser conversations continue to be incrementally positive about Twitter's ad business."

Nowak upgraded the stock to underweight due to the strength of increasing ad sales as well as user growth.

However while Facebook and Google are losing some dominance in the market, Twitter isn't the direct beneficiary, Williamson said. The slight decrease is mostly going to Amazon. Media buyers echoed the same sentiment to CNBC, saying the increase in Twitter's budget is more from the overall shift of advertising dollars from TV to digital.

Other analysts are pointing to Twitter's ability to become a news source as proof of staying power.

"We think execution was sub-par for about three years leading into 2017 and has improved under the return of its co-founder as CEO [Jack Dorsey]," MKM Partners' Rob Sanderson wrote in a note to investors where he upgraded the stock to a buy. "Despite this lengthy execution gap and hefty competition for user time and attention, the company has maintained its position as the go-to source for what's happening in the world."

However Forrester analyst Erna Alfred Liousas said despite increasing ad engagement and growing video streaming, the company may not be able to add more users than expected.

"People will always focus on Twitter's MAU number because that has become a default measurement for social networks," she wrote in an email to CNBC. "We've seen minimal growth year over year and at this time I don't see anything indicating that trend will change."