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LinkedIn Corp (NYSE:LNKD)’s Tepid Guidance Drove Its Shares Down

Boston, MA 05/06/2014 (wallstreetpr) – Weaker 2014 revenue forecast has dragged down LinkedIn Corp (NYSE:LNKD)’s shares by more than 8% on Friday. Last week, the social networking company, which aims at bridging the gap between professionals and prospective employers, released revenue estimates that came in below the Wall Street’s expectations.

Forecasts Lag Behind Expectations

LinkedIn Corp (NYSE:LNKD) forecasts revenue to range in between $500-$505 million in the current quarter, as against the targeted estimate of $505.1 million by the Wall Street. For the year 2014, the company anticipates sales to be in between $2.06-$2.08 billion, which is higher than its previous year’s estimate but still trails the analysts’ forecast of $2.11 billion.

The company’s lukewarm guidance eclipsed the impressive first quarter revenue, which rose 46% to $473.2 million, higher than the analysts’ average projection of $466.6 million. Moreover, during the first quarter, the company posted better than estimated non-GAAP earnings at $0.38, higher than the $0.34 estimate.

Prospects Of The East

In the recent past, LinkedIn is aggressively transitioning from that of an online gathering space for professionals to a more serious employment service provider, and is also currently tapping the potential of mobile advertising platform, original content and marketing solutions for unlocking a separate revenue stream. Also, it is trying to imitate the success it achieved back in the U.S., in international markets. Thus, LinkedIn Corp (NYSE:LNKD)  introduced a Chinese language “beta” version of its main website in February, with the goal of capturing market share in the world’s largest Internet market. However, the company accepted the fact that it will have to keep a watch on what some of its members say on the website.

Nevertheless, Wall Street has set high hopes for the company, which is still growing its top line at solid double-digit-rates, while appealing new members to its growing network.

At the end of the fourth quarter,LinkedIn Corp (NYSE:LNKD)’s membership grew 8.3 percent to 300 million across the globe. The rate of growth represents a marginal improvement from its 7% growth in the fourth quarter in 2012. LinkedIn’s fourth-quarter revenue fell below the Wall Street’s target, which is for the first time since it went public in 2011.

Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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