Tuesday, July 29th27.7°C
21450
21755

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

22767


Recent Trending




Today's Market
S&P TSX15486.70+41.48
S&P CDNX1015.97-3.88
DJIA16963.52-19.07
Nasdaq4451.922+7.013
S&P 5001975.66-3.25
CDN Dollar0.9213-0.0048
Gold1310.00+6.70
Oil100.94-0.73
Lumber321.40-1.60
Natural Gas3.793+0.046

 
Okanagan Companies
Pacific Safety0.185-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.19+0.04
Cantex0.065-0.005
Anavex Life Sciences0.26-0.005
Metalex Ventures0.085+0.005
Russel Metals35.34+0.19
Copper Mountain Mining2.89-0.08
Colorado Resources0.22-0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025+0.005
Mission Ready Services0.17-0.02

 





FEATURED Property
1968271209-255 Aurora Crescent
2 bedrooms 2 baths
$169,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22685