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LINKEDIN’S DISAPPOINTING GUIDANCE - SHARES PLUMMET

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LinkedIn on STOCK.com

LINKEDIN’S DISAPPOINTING GUIDANCE - SHARES PLUMMET

May 1 2015, 08.15am GMT

STOCK.com

LinkedIn Corp. released guidance for the 2nd quarter and year that missed Wall Street estimates, seeing its stocks plummet in after-hour trade.

LinkedIn Corp. (NYSE: LNKD) released guidance for both the 2nd quarter and the year that did not reach estimates by Wall Street, sending the stock plummeting in after-hours trade.

The company said that it expects 2nd quarter earnings per share without items of 28 cents per share while Thomson Reuters analysts forecasted 74 cents. LinkedIn sees, for this year, earnings without items of around $1.90 per share, lower than the average analyst expectation of $3.03.

Furthermore, the company forecasts between $670 million & $675 million in second quarter revenue and around $2.9 billion for the year. However, analysts averaged at $717 million & $2.98 billion respectively.

LinkedIn shares, increasing 64 percent over the last year, dropped 25 percent to $188.59 in after-hour trade.

LinkedIn posted a 1st quarter loss of $42.4 million – 34 cents per share, compared to losses of $13.3 million – 11 cents per share a year-ago. Leaving out stock-based compensation & other items, profit increased to $72.5 million – 57 cents per share, from $47.3 million – 38 cents per share last year. Revenue is up from $473.2 million to $637.7 million.

The company forecasted earnings, without items, of 53 cents per share with $618 million to $622 million revenue.

Jeff Weiner, chief executive of LinkedIn, said in a press release that the first-quarter was solid; adding that during this quarter, steady increase in member engagement was maintained while still seeing great financial results.

LinkedIn saw a growth in membership to greater than 350 million, an increase of around 16.7 percent from last year.

The company is somewhat different to its peers within the social-media market as its primary revenue is not from advertising. The biggest source of revenue, at about 60 percent, is by far its talent-solutions business sold to recruiters. Its advertising and premium subscriptions income stream equates to around 20 percent each of the total revenue.

By purchasing lynda.com for $1.5 billion, LinkedIn is now entering the online learning market. The website lynda.com has managed to rise to 1st place in professional training videos on topics like digital photography and web design. This cash-and-stock deal, which was announced on the 9th April, expects to be concluded in the 2nd quarter and will be LinkedIn’s largest yet.

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