LinkedIn share price tanks as it misses earnings forecasts

 
Jessica Morris
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LinkedIn shares tumbled more than 20 per cent (Source: Getty)

LinkedIn shares plummeted in after-hours trading last night, after its outlook and earnings guidance left investors sorely disappointed, despite its membership growing to a whopping 414m users in the fourth quarter.

Users are also more likely to find a job on the professional networking website, with the number of jobs advertised doubling compared with a year ago to more than six million open listings.

LinkedIn reported revenue rose 34 per cent year-on-year to $862m in the fourth quarter, beating analysts' estimates for $858m.

But the company was let down by its revenue guidance for the first quarter of 2016, which it put at $820m, well below the consensus estimate of $866.9m. It also expects adjusted profit of about 55 cents per share, way below the average analyst estimate of 74 cents.

The news sent the group's shares plummeting 26.63 per cent to $141.85 in after-hours trading.

The company faces headwinds in its online ads and recruitment services businesses in markets outside North America.

Adjusted earnings per share came in at 94 cents, again smashing Wall Street's expectations for 78 cents.

Talent solutions' revenue, the company's largest segment, swelled 45 per cent year-on-year. At the same time, marketing solutions' revenue added 20 per cent during this period, while premium subscriptions' revenue increased 19 per cent.

“Q4 was a strong quarter for LinkedIn, bringing to a close a successful year of growth and innovation against our long-term roadmap,” said Jeff Weiner, chief executive of LinkedIn, in a statement.

“We enter 2016 with increased focus on core initiatives that will drive leverage across our portfolio of products.”

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