LinkedIn Corp (LNKD) Mixed, Lower Guidance Tanks Shares

0
LinkedIn Corp (LNKD) Mixed, Lower Guidance Tanks Shares
MarcoGonzalez / Pixabay

After the bell Thursday, LinkedIn Corp (NYSE:LNKD) reported its fiscal 4th quarter and full-year numbers. And while the professional Internet media firm topped estimates on revenues, it was an earnings miss on the bottom line. LNKD shares are sinking like a stone in the after-market.

Play Quizzes 4

Earnings of 5 cents per share (before non-recurring items, stock-based compensation and amortization) missed the Zacks Consensus Estimate of 8 cents. Yet revenues of $447.2 million in the quarter topped the Zacks Consensus Estimate of $440 million. LinkedIn’s 277 million members overall was more than analysts had expected. Talent Solutions, which make up over half the company’s total business, increased 53% year over year, and Marketing Solutions and Premium Subscriptions also demonstrated healthy year over year growth.

[Exclusive] ExodusPoint Is In The Green YTD Led By Rates And EM/ Macro Strategies

Invest ESG Leon CoopermanThe ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More

But the guidance? That’s another story.

Both for fiscal Q1 and full-year 2014, LinkedIn low-balled their estimates well below where we anticipated guidance would be. While the company estimates revenues between $455-460 million next quarter — a steady improvement from Q4 — guidance is lower than the Zacks Consensus Estimate by $7 million. Full-year guidance of $2.02-2.05 billion is similarly down from the Zacks estimate of $2166 million we were expecting.

So now analysts will get busy downwardly revising estimates, which will likely keep LinkedIn a Zacks Rank #5 at least a little while longer. But first, the after-market is letting LinkedIn know how it feels about revenue projections like these, and the results aren’t pretty: LNKD shares are down around 10% just since the earnings announcement. In regular-day trading LinkedIn was up 4.24%; apparently investors thought the company’s report was going to be a lot better received than this.

As we saw with Twitter (TWTR) yesterday failing to reach an expected growth target and seeing the stock get punished in late trading, so we see here today with LinkedIn not expecting to keep up its growth trajectory in the current year. Perhaps much was based on some pretty lofty expectations — speaking of, LinkedIn’s market cap is the very definition of a lofty expectation — and cooler heads will prevail once everything is sorted out. But in the meantime, if you’re linked to LinkedIn, you’re probably feeling a little dragged down right now.

LINKEDIN CORP-A (LNKD): Free Stock Analysis Report

TWITTER INC (TWTR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Updated on

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were audited and attested by Baker Tilly, an independent accounting firm.
Previous article Tesla Motors Inc (TSLA): Times Are Changing, But How Quickly?
Next article What’s Next For Twitter After Disastrous Earnings?

No posts to display