But the company’s guidance for its first quarter and the full year was much worse than analysts expected.
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LinkedIn expects sales to reach $820 million in the first quarter, which is lower than the $866 million that analysts surveyed by Thomson Reuters had forecast. Wall Street analysts had been expecting $857.59 million in revenue and $0.78 EPS.
While the rest of the earnings statement seemed to disappoint investors in a major way, the addition of the new company shows LinkedIn continues to look for ways to build out its core business.
In an email to Benzinga, tech expert Sean Udall mentioned that, “My best guess on LNKD is that the job’s market is decelerating very rapidly contrary to FED rate HIKE hopes and dreams”. LinkedIn stock has declined by more than 15% since the start of fiscal year 2016 as compared to Dow Jones Index which has fallen by 6% so far this year. These include “sponsored updates” (native ads), “lead accelerator” (a lead generation tool), plain old display ads, and LinkedIn Premium (an enhanced subscription service). The site finished the year with 414 million users.
LinkedIn reported fourth quarter earnings that surpassed analysts’ estimates, but that didn’t stop the shares from falling in Thursday’s after-hours trading.
The Mountain View, CA-based professional online network set its non-GAAP earnings outlook at 55 cents per share, significantly below estimates of 74 cents per share. LinkedIn Corp’s quarterly revenue was up 34.0% on a year-over-year basis.
“While initial demand was solid, the product required more resources than anticipated to scale”, Sordello said. But it was expectations for the current period that disappointed Wall Street. The stock plunged last spring when the company lowered its revenue forecast and warned of short-term costs associated with its $1.5 billion (roughly Rs. 10,144 crores) purchase of online education company Lynda.com.
One analyst pointed out that unique visitor growth had slowed to 7% in the fourth quarter and asked whether or not user growth had hit peak penetration.
The company, which had a profit in the year-earlier quarter, has been spending heavily on expansion by buying up companies, hiring sales personnel and increasing its presence in China and other markets. Facebook may be trying to steal a piece of the LinkedIn pie, as they just launched a new service that allows employees of a company to chat with their colleagues.
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A LinkedIn spokesman said “hunters” refer to salespeople who go out and find new customers, while “farmers” refers to relationship managers.
