‘extraordinary miss’

LinkedIn revenue let-down sends shares diving after hours.

• LinkedIn Corp. shares plunged as much as 27 per cent after the company forecast revenue that missed analysts’ estimates, citing the strong dollar and slower-than-projected growth.

Second-quarter revenue will be US$670 million to US$675 million, the company said in a statement Thursday. Analysts had predicted US$718.3 million, on average, according to data compiled by Bloomberg. The social-networking site for professionals also trimmed its forecast for annual revenue to US$2.9 billion from between US$2.93 billion and US$2.95 billion.

“This is an extraordinary miss for a company that has by and large avoided any major blowups since going public,” said Paul Sweeney, an analyst at Bloomberg Intelligence.

The company’s shares were down 23 per cent in extended trading, after dropping two per cent to close at US$252.13. The stock had gained 9.7 per cent this year.

First-quarter revenue slowed in LinkedIn’s main business of serving recruiters, according to the company’s prepared statement for a conference call with investors. Assigning accounts to new sales representatives at the beginning of the year caused some customer loss, LinkedIn said.

Growth was also affected by currency-exchange rates, as LinkedIn generated 39 per cent of its revenue from outside the U.S. The Bloomberg Dollar Spot Index, a measure of the U.S. currency against 10 major peers, gained 6.2 per cent in the first quarter.

Chief executive Jeff Weiner has been spending to build the company’s business beyond its foundation as a portal for recruiters and job hunters, with tools that use the site’s user data for marketing and sales.

Those efforts aren’t translating to as much revenue growth as expected, Sweeney said. First-quarter revenue from marketing products rose 38 per cent from a year earlier to US$119 million. Sales from services that companies use to recruit increased 36 per cent to US$396 million.

Earnings excluding some items were US$73 million, or US57 cents a share, matching analysts predictions.

LinkedIn’s net loss widened to US$42.5 million, or US34 cents a share, from US$13.4 million, or US11 cents a share.

Revenue rose 35 per cent to US$638 million. Analysts had projected US$637.8 million.

The site, based in Mountain View, California, continues to expand its services, moving into professional education with an agreement this month to acquire Lynda.com Inc. for US$1.5 billion. The site is a privately held online education company offering video courses in software, creative and business skills.