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LinkedIn Corp. sales forecast lags behind projections amid slow growth

LinkedIn Corp. announced its sales forecast, which trailed analysts estimates and pushed its stock down as much as 15% in extended trading. The company also revealed that all three of its professional-networking websites businesses have been experiencing slower growth.

LinkedIn Corp. made an official statement, saying that its first-quarter revenue is expected to be 455 million dollars. According to data compiled by Bloomberg, analysts average projected sales were estimated to 469.4 million dollars.

The company said that its net income decreased by 67% to 3.78 million dollars, or 3 cents a share, in the fourth quarter. In comparison, LinkedIn Corp.s net income for the same period a year earlier was estimated to 11.5 million dollars, or 10 cents a share. The companys sales rose by 47% for the period and reached 447.2 million dollars, which exceeded the average estimates of 437.6 million dollars.

Since the initial public offering in 2011, the companys shares have risen more than four times. LinkedIn is now headed for its fifth consecutive quarter of slowing sales growth. The company said it seeks to expand its potential revenue base by trying to reach workers overseas, adding some mobile features and making some acquisitions. In its statement, LinkedIn announced that it bought Bright Media Corp., an analytics company helping employers to find the best candidates for the positions they offer, in a deal estimated to about 120 million dollars in cash and stock.

One of the analysts working for ITG Investment Research – Steve Weinstein said for Bloomberg: “LinkedIn is continuing to grow, but that growth is slowing because of a scaling up of the business. As you get bigger, it gets harder and harder to find a lever that can be material to growing your business.”

Jeff Weiner, Chief Executive Officer of LinkedIn, said on a conference call yesterday that the company has prioritized its expansion on the Chinese market, because this is a key part of its growth strategy. As Bloomberg reported, Mr. Weiner also revealed that LinkedIn could establish a joint venture in China in order to find a way to shake the market provided the challenges that U.S. Internet services have experienced in the country.

Mr. Weiner said that China is “where today we already have 4 million members, but where nearly one in five of the world’s knowledge workers and students live.”

LinkedIn Corp.s shares rose by 4.24% in New York yesterday to settle at $223.45, marking a +77.67% one-year change. According to CNN Money, the 32 analysts offering 12-month price forecasts for LinkedIn Corp. have a median target of $272.50, with a high estimate of $300.00 and a low estimate of $214.00. The median estimate represents a +21.95% increase from the last close.

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