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Snapchat shares rise after solid fourth-quarter earnings

By
Ray Downs
A banner advertising Snap hangs from the facade of the New York Stock Exchange as Snap's initial public offering debuts in New York City on March 2. The company posted solid fourth quarter earnings for 2017, resulting in a 20 percent increase in stock value. File Photo by Monika Graff/UPI
A banner advertising Snap hangs from the facade of the New York Stock Exchange as Snap's initial public offering debuts in New York City on March 2. The company posted solid fourth quarter earnings for 2017, resulting in a 20 percent increase in stock value. File Photo by Monika Graff/UPI | License Photo

Feb. 6 (UPI) -- Stocks for Snap, Inc., the parent company of Snapchat, increased 20 percent Tuesday after fourth-quarter results exceeded Wall Street expectations for the first time.

The social media app generated revenue of $285.7 million -- a 72 percent year-over-year increase -- in the fourth quarter of 2017. The revenue numbers were more than $30 million over the $253 million that had been expected.

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Snap also increased its daily active users by 8.9 million, a 5 percent increase, bringing its total to 187 million, the company said in an earnings release.

"Our business really came together toward the end of last year," Snap CEO Evan Spiegel said on a conference call with analysts Tuesday, according to CNN.

Analysts said Snapchat bounced back efficiently after taking a hit from disappointing sales of its highly touted Spectacle glasses, which didn't catch on with users despite a big push to market the product.

Snap also redesigned its app's interface to make it easier to use and more accessible to older users, which could explain the increase in daily active users.

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"This quarter was a major step in the right direction for the company," said Daniel Ives, an analyst with GBH Insights.

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