SAN FRANCISCO — The honeymoon is already over for newly installed Twitter CEO Jack Dorsey.

Twitter TWTR shares plunged 13% to $27.25 in after-hours trading after the troubled social media company showed it continued to struggle to attract new users and disappointed investors with a weak fourth-quarter forecast.

Twitter was hammered after it said it expects fourth-quarter revenue to range from $695 million to $700 million, far lower than analysts’ estimates of $739.7 million.

Twitter also alarmed investors with yet another quarter of lackluster user growth. The San Francisco company said it had 320 million monthly active users in the third quarter. Excluding “fast followers,” who are SMS users, Twitter had 307 million monthly active users. Both figures were below Wall Street consensus. Facebook has about five times as many users as Twitter.

“Twitter improved sequentially 1%, which is essentially no growth, although it’s better than losing users,” Wedbush Securities analyst Michael Pachter said. “But the guidance clearly implies a slowing business and quite possibly a decline in users. … The guidance figure is not impressive at all and it’s below consensus, which is always a problem.”

The double whammy — the weak forecast and lackluster user growth — dampened the excitement surrounding co-founder Dorsey, whose return seemingly held the promise of at last unlocking Twitter’s vast but largely untapped potential. The third quarter, the three months ended in September, unfolded on Dorsey’s watch. Dorsey was serving as interim CEO before Twitter appointed him CEO.

The main challenges facing the 38-year-old Twitter co-founder: to reignite user growth and pump up revenue at the social media service he created nine years ago. The two challenges go hand in hand: Revenue can only grow so much without more people to view ads on Twitter.

Last week, Morgan Stanley downgraded Twitter’s stock TWTR to the equivalent of a sell rating, saying tepid user growth would limit revenue growth.

“If Jack Dorsey is worthy of being Twitter’s CEO, he has to address this,” Pachter said.

Under Dorsey, Twitter has quickened the pace of innovation, introducing efforts to lure new users, such as Moments, which curates tweets about live events.

During a conference call with analysts, Dorsey pledge to make Twitter easier to use and more approachable. He also hinted at new “bold” features that question the “fundamentals” of Twitter.

“Tackling the usability issue is a key objective they need to address to create movement around user growth and retention,” said Forrester Research analyst Erna Alfred Liousas.

Twitter did  top Wall Street estimates on revenue and earnings. Third-quarter revenue jumped 58% to $569 million, showing Twitter’s advertising business continues on a strong beat despite struggles with stalled user growth. Analysts had expected sales of $559.4 million. Twitter reported sales of $361.3 million a year ago.

Twitter remains unprofitable. Including expenses, Twitter lost 20 cents a share. Analysts expected a loss of 27 cents a share, according to Thomson Reuters.

It reported adjusted earnings a share of 10 cents, topping forecasts for 5 cents. Twitter reported adjusted earnings a share of 1 cent a year ago.

In the fourth quarter, Twitter said it expected adjusted earnings in the range of $155 million to $175 million. Expenses include $10 million to $20 million in restructuring charges from the layoffs.

Twitter reported third-quarter earnings after the close of trading Tuesday. Shares closed up 1.5% to $31.34.

Dorsey broadcast the earnings call with analysts on Periscope and even took viewers on a tour of the company’s San Francisco headquarters.

Follow USA TODAY senior technology writer Jessica Guynn @jguynn

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