Wednesday, April 1st3.5°C
25757
22952

LinkedIn's stock falls after forecast of slowing growth, higher spending upstages solid 4Q

SAN FRANCISCO - LinkedIn finished last year with a strong showing, but the online professional networking service rattled already jittery investors by indicating its performance will weaken this year as management ramps up spending while revenue growth slows.

The projection released Thursday with LinkedIn's fourth-quarter results triggered an 8 per cent drop in the company's stock price during extended trading. The shares shed $17.91 to $206.54.

LinkedIn Corp. also announced it is spending $120 million to buy Bright, a startup that makes data-analysis tools matching job hunters with employers.

The acquisition could foreshadow a year of heavy investment that crimps LinkedIn's earnings. CEO Jeff Weiner emphasized the Mountain View, Calif., company will be spending "significantly" on data centres and long-term projects that may take several years to pay off.

The late sell-off in LinkedIn's stock came a day after another online networking service, Twitter Inc., disappointed Wall Street with a fourth-quarter report that revealed a jarring slowdown in its user growth. Twitter only added 9 million users during the period, well below its quarterly average of 16 million additional users during the previous year.

In contrast, LinkedIn is persuading more people to set up accounts and share their job histories at a steady pace that suggests more people are interested in managing their careers than sending short messages on Twitter.

Another 18 million LinkedIn accounts were set up in the fourth quarter, extending the service's reach to 277 million users through December. That matched the average of additional accounts that LinkedIn gained in the previous four quarters. Twitter ended December with 241 million users.

But LinkedIn appears to be having problems establishing its service as an alluring destination that keeps people coming back. Both the number of visitors to LinkedIn's site and the number of total pages viewed declined during the final three months of last year, marking the second consecutive quarter of decay.

That's a troubling trend because it means fewer opportunities for online advertising, which currently accounts for about one-fourth of the LinkedIn's revenue. The company makes most of its money from subscriptions and other fees paid by employers and headhunters.

LinkedIn earned $3.8 million, or 3 cents per share. That was down 67 per cent from $11.5 million, or 10 cents per share, a year earlier.

If not for certain expenses, LinkedIn said it would have earned 39 cents per share — a penny above the projections of analysts surveyed by FactSet.

Revenue climbed 47 per cent from the previous year to $447 million. Analysts had anticipated revenue of $438 million.

Management predicted revenue of $455 million to $460 million during the first three months of this year, below the average analyst estimate of $471 million.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14902.44-5.95
S&P CDNX680.07-0.26
DJIA17776.12-200.19
Nasdaq4900.88-46.56
S&P 5002067.89-18.35
CDN Dollar0.7884-0.0004
Gold1185.10+2.00
Oil47.25-0.35
Lumber275.30-2.90
Natural Gas2.65+0.01

 
Okanagan Companies
Pacific Safety0.125+0.010
Knighthawk0.010.00
QHR Technologies Inc1.48-0.02
Cantex0.03-0.01
Anavex Life Sciences0.211-0.004
Metalex Ventures0.04+0.00
Russel Metals24.04-0.36
Copper Mountain Mining1.16-0.02
Colorado Resources0.11-0.01
ReliaBrand Inc0.0036-0.0024
Sunrise Resources Ltd0.04-0.01
Mission Ready Services0.25+0.02
Decisive Dividend Corporation1.80+0.02

 



25775

FEATURED Property
2114033220A 40 Kettle View Road
2 bedrooms 2 baths
$204,500
more details
image2image2image2
Click here to feature your property
Please wait... loading


Down payment

If you have less than 20% down payment, mortgage insurance is required through Canada Mortgage & Housing (CMHC), Genworth or Canada Guaranty. Homeowners no longer need the minimum 5% down payment ...


CRA Notice of Assessment

Many Canadians rush to file their taxes on time each year and don’t think about it until the next year. One of the most overlooked notices received from the CRA annually is the annual Notice of ...


Medical confidential?

If ICBC asks your doctor for your information you may wonder: Can ICBC ask my doctor for my medical information? Can ICBC request a medical report from my doctor without my consent? What is ICBC entit...

_








Member of BC Press Council


25732