LinkedIn (LNKD) Stock Hammered on Lower Guidance

Shares of LinkedIn Corp. (LNKD) were trading down -52.08 or -20.66 percent to $200.05 per share in this morning's premarket after the company reported earnings and revenue late yesterday. The company reported earnings that topped analyst estimates for the first quarter, but missed revenue forecasts for the second quarter. In addition, the company cut its full year guidance. LinkedIn stock closed at $252.13 per share, down -5.02 or -1.95 in Thursday's regular trading session.



Mountain View, California based LinkedIn Corp. is a social network website that offers services to people in professional capacities.
Founded in 2003, LinkedIn has grown exponentially, having grown to a total of over 350 million acquired users in 200 countries around the world and is the largest professional network on the Internet. In addition, the company has over 30,000 corporate customers. LinkedIn's average net yearly profits have grown an average of +139 percent every year since its founding and the firm is considered one of the most successful startups of all time.

For its first quarter of 2015, LinkedIn reported non-GAAP diluted earnings per share of +$0.57 versus +$0.38 for the first quarter of 2014. GAAP diluted earnings per share showed a loss of -$0.34 versus GAAP diluted EPS of -$0.11 per share in the same period one year ago.

Revenue for the quarter increased to $638 million in the quarter compared to $473 million in the same quarter last year, an increase of +35 percent. Analysts expected the company to report earnings of $0.56 per share on revenue of $636 million.

Jeff Weiner, Chief Executive Officer of LinkedIn said in the company's press release that, "Q1 was a solid quarter in which we made meaningful progress against our multi-year strategic roadmap. During the quarter, we maintained steady growth in member engagement while achieving strong financial results.

Steve Sordello, the company's Chief Financial Officer stated, "LinkedIn demonstrated continued solid growth during the first quarter. This performance comes amidst the backdrop of several important strategic investments to better position the business to execute on our long-term roadmap.

LinkedIn said that it expects its second quarter adjusted profit to come in at $0.28 per share, significantly lower than analyst estimates of $0.74 per share. The company's revenue guidance for the second quarter was between $670 and $675 million, also notably below analyst forecasts of $717 million. For the full year, Linked in expects an adjusted profit of approximately $1.90 per share on revenue of about $2.9 billion, significantly lower than analyst forecasts of earnings of $3.03per share on revenue of $2.98 billion.

According to the company, its recent acquisition of Lynda.com, an online educational website that prepares people for new jobs, will affect earnings for the rest of the year. LinkedIn acquired Lynda.com at the beginning of April for $1.5 billion. The deal is expected to close by the second quarter of 2015.

LinkedIn stock is taking a beating in this morning's premarket, having appreciated +60 percent for the year before this morning's routing. The company's miss on second quarter and full year guidance is the first time that the stock misses analyst forecasts since it had its initial public offering in May of 2011.

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Published on May 1, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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