This is not a good week to be an Internet company. Several companies in the industry have reported lackluster quarterly earnings, but even though LinkedIn has an excellent quarter, its projections for future earnings and revenue are disappointing. This prompted the company’s stock to fall by more than a quarter in after hours trading, which pretty much hacked off $8 billion in market value from LinkedIn.
Internet companies are having a lousy earnings week on Wall Street. LinkedIn stock fell more than 25% in after hours trading on Thursday, effectively shaving off about $8 billion in market value, after the company reported March quarter earnings that were almost exactly in line with analyst estimates, but disappointed on projections for earnings and revenue for the upcoming quarter. The social network for professionals estimated that it would post earnings of $0.28 per share on revenue of $670 million to $675 million for the June quarter, well below the consensus estimate among analysts for earnings of $0.74 per share on revenue of $718 million. In a statement included with its earnings release, LinkedIn CFO Steve Sordello appeared to suggest that the lackluster guidance was due in part to greater investments in the business. “LinkedIn demonstrated continued solid growth during the first quarter,” Sordello said. “This performance comes amidst the backdrop of several important strategic investments to better position the business to execute on our long-term roadmap.”
