Shares of LinkedIn Corp. (NYSE:LNKD) fall over concerns on earnings – GOOG, YHOO

Boston, MA 05/06/2013 (wallstreetpr) – The increasing investor concern on success of mobile advertising had sliced LinkedIn Corp. (NYSE:LNKD) stock to $175.59, 13 percent decline over its previous close. The revenue of company from mobile advertising is not rising to meet the expectations, despite the announcement of $90 million plan for the mobile newsreader, Pulse and the revamp of professional networking site on smart phones.
The desktop to mobile shift has not been equally matched with the advertising on mobile phones, thereby resulting in less ad revenue. LinkedIn Corp. (NYSE:LNKD) (Closed: $175.59, Down by 12.93%) has managed to double its membership to 218 million since its initial public offer and has recorded 73 percent increase in premium subscription sales. Further the firm had recorded 80 percent increase in its talent solutions product and 56percent increase in ad revenue. However these jumps could not support the sales forecasts for fiscal year 2013 which were estimated to be around $1.43 billion to $1.46 billion. The ad revenue was also forecast to be around $342 million to $347 million which trailed the average analyst projections of $359.7 million, thereby dumping the company’s share prices to a biggest decline since August 08, 2011.

PRICE EARNINGS RATIO

However the price earnings ratio of LinkedIn Corp. (NYSE:LNKD) still stands high at 502 much higher than that of Google Inc. (NASDAQ:GOOG) (Closed: $845.72, Up by 1.94%) and Yahoo Inc. (NASDAQ:YHOO) (Closed: $25.07, Up by 0.40%)whose value are fixed at around 26 times of their earnings. The ratio is however well three times below that of its social networking competitor, Facebook Inc. (NASDAQ:FB), which is expensively valued at 1400 times the earning. The biggest social networking site, Facebook Inc. (NASDAQ:FB) (Closed: $28.31, Down by 2.27%), however managed to move ahead of the analysts’ projections to record 30percent sales revenue from mobile advertising.

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Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.