LinkedIn shares plunge by 25pc as outlook cut
LINKEDIN shares plummeted by 25 per cent in after hours trading after the networking company cut its revenue and earnings guidance for the year.
The business networking site lost around $7bn (£4.6bn) from its market capitalisation after it warned sales this quarter would be $670-$675m – well under analyst forecasts of $717.5m. The share damage was similar to that suffered by Yelp and Twitter earlier in the week.
The site has been hit by currency fluctuations, a slump in its European advertising sales and the cost of its $1.5bn purchase of Lynda.com, the online learning site.
For the year, LinkedIn forecast profit of $1.90 per share, excluding items, on revenue of $2.9bn. Its earlier expectation was $2.95 per share on revenue of $2.93-$2.95bn.
Despite the weak outlook, LinkedIn said first-quarter revenue rose 35 per cent to $637.7m, up from $473.2m a year earlier and beating analysts’ forecast of $636m.
However its net loss widened to $42.4m for the quarter compared with $13m for the period last year.
Chief executive Jeff Weiner described the quarter as “solid” with “steady growth”.