LinkedIn takes a tumble after disappointing sales forecast

<p>Shares in LinkedIn have fallen since it published a disappointing sales outlook.</p>

LinkedIn stocks took a hit last night (May 1st), after disappointing sales forecasts overshadowed positive earnings figures.

After closing at $161.22 in New York yesterday, after-hours trade saw the company lose 4.42 per cent from its share price, when it emerged that LinkedIn anticipates sales of between $2.06 (£1.2 billion) and $2.08 billion this year. Analysts had expected the figure to stand closer to $2.11 billion.

What’s more, it reported a $13.4 million loss for the first three months of the year, in sharp contrast to profits of $22.6 million over the same period last year. This was slightly better than expected but failed to reassure investors. Stock compensation costs paid to employees and amortisation of recent acquisitions contributed to higher outgoings.

Yet revenue did actually increase over the quarter, with an impressive jump of 46 per cent from $324.7 million to $473.2 million year-on-year.

“The first quarter was strong for LinkedIn in terms of our member engagement and financial results,” said chief executive Jeff Weiner.

Heavy investment

With substantial investment planned for this year, LinkedIn remains optimistic about its prospects. Q1 saw the professional networking site launch a beta or test version of its Chinese-language site, which it says could rapidly expand the number of Chinese users.

Whereas four million Chinese users currently visit the site in its English-language format, the company says it could reach many more of the 140 million Chinese professionals and students it is targeting.

It has also launched a publishing platform allowing members to share longer content, an initiative which it says has been met with encouraging engagement levels. In addition, members can more view more detailed information about how to develop their professional identities through the “Who’s Viewed Your Profile” function.

“We made significant progress against several strategic priorities including expanding internationally with our China launch, extending our shift to content marketing, and furthering our goal to make LinkedIn the definitive professional publishing platform by giving members the ability to publish long-form content,” Mr Weiner explained.

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