* Sees Q4 revenue $415 mln to $420 mln vs $438 mln consensus
* Shares fall after says Q4 growth won't match last year's
* Q3 earnings beat forecasts, user numbers surged
By Gerry Shih
SAN FRANCISCO, Oct 29 LinkedIn Corp
issued a conservative revenue forecast through the end of the
year that damped a sizzling run in its stock price, taking the
shine off an upbeat performance at the professional social
network in the third quarter.
The company said it expected between $415 million and $420
million in revenue for the final three months of the year, lower
than the $438 million expected by analysts polled by Thomson
Reuters I/B/E/S. LinkedIn said fourth-quarter growth will not be
as impressive as a year ago when it rolled out new features.
Reflecting better-than-expected numbers for July-September,
it did nudge its full-year estimates upward to $1.5 billion. But
that also fell slightly short of Wall Street's sky-high
Shares in the company that's become an online reference
point for job searches and career development slid 4.5 percent
to $236 in choppy after-hours trading. Even at that price, the
stock has more than doubled in the past year and quintupled
since 2011, when it went public at $45 a share.
LinkedIn's dizzying valuation - with a market value of $27.7
billion it is trading at roughly 158 times forward earnings,
compared with Facebook Inc's 70 times and Google Inc's
23 - has heightened scrutiny on whether the company can
maintain its growth streak.
So far, Chief Executive Jeff Weiner has beaten top-line
targets every quarter since his company went public. But
LinkedIn, a company born in the quickly fading era of desktop
Internet sites, has had to move swiftly to pursue a variety of
other revenue streams.
On a conference call Tuesday, Weiner said finding ways to
make money out of the company's mobile applications is a matter
of "strategic importance," describing the company as being in a
"transition period" as it introduced new mobile advertising
On Tuesday the company's executives downplayed expectations
for the fourth quarter, warning desktop page views could
But Kerry Rice, an analyst at Needham & Co, noted that
LinkedIn has guided conservatively for several consecutive
quarters only to exceed targets. "People get a little too
exuberant," Rice said. "This was resetting those expectations."
LinkedIn's fundamental business roared along in the third
Monthly users rose to 259 million during the quarter, a 38
percent rise from a year ago, LinkedIn said. In the quarter, the
company earned 39 cents a share, excluding certain items,
exceeding the 32 cents expected by analysts.
By making itself a popular tool for professional recruiters
and job seekers who are willing to pay for its services, the
company has enjoyed a steady stream of income and avoided the
turbulence encountered by free, consumer-facing social networks
Like many other Internet companies, LinkedIn emphasized its
shift to mobile. Mobile users now account for 38 percent of
total users versus 8 percent in early 2011, CEO Weiner said.
LinkedIn in July introduced ads called "Sponsored Updates"
to its mobile applications.
The in-stream ad unit, which resembles ones used by Facebook
and Twitter Inc has generated the majority of clicks
from users on mobile devices rather than LinkedIn's desktop
website, Weiner told analysts.
But he warned that the ads will not generate enough revenue
to make a material impact until next year.
The company's aggressive push into mobile has not been
without bumps. Security experts this week criticized a new
LinkedIn feature called "Intro," which re-routes a user's emails
through LinkedIn's servers, as a potential security risk.
The company was pressed to issue a blog post last week to
clarify some of its security practices while also characterizing
some of the criticisms leveled against Intro as "speculative."
Asked about the issue by an analyst on Tuesday, Weiner did
not address the matter in depth except to say, "We recognize the
current climate and the sensitivity around this, and work hard
to make sure it's as secure as possible."