LinkedIn (NYSE:LNKD) shares drop at $150 apiece, while results are released on Friday May 2nd. Following LinkedIn’s poor performance in 2014 (-25%) compared to a 2% gain in the &P 500 index. Founded in 2002 by Jeffrey Weiner in Mountain View, California, the professional social media has been a big success on the stock market so far, but concerns about the company’s forecasts hit the share price today.
For Q1 2014, LinkedIn (NYSE:LNKD) reported $473.2 million sales, a brisk growth of +46% YTD. However, higher than expected operating expenses cut earnings below mots analysts’ hopes on LinkedIn 2014 performance. In the first quarter of the year, LinkedIn had a $116.7 million EBITDA and a $13.4 million net loss. This compares to a $22.6 million of net income in Q1 2013. Revenue from LinkedIn’s Talent Solutions line are a big success, with a 50% increase $275.9 million. LinkedIn said it now has 25,000 recruiter BtoB accounts. Wall Street’s analysts expect LinkedIn to launch at full speed a similar line of services focused on sales growth. However, Jeff Weiner didn’t provide a likely launch date in the Q1 conference call with management.
Sales expectations from LinkedIn’s management are now $500 million revenues and $118 million EBITDA for Q2 2014. These levels are below Wall Street analysts’ expectations according to First Call ($505 million revenues and Ebitda of $120 million). Same trend for the full-year 2014, with LinkedIn (NYSE:LNKD) expected revenue of $2.06 billion and $505 million EBITDA to $510 million, -5% short of The First Call consensus of stock market analysts.
From a long-term perspective, LinkedIn (NYSE:LNKD) maintains its objectives of a 30% Ebitda profit margin, up from the current 25%. LinkedIn CFO Steve Sordello indicated that the company is committed to invest in build long-term value, rather than meeting the Ebitda target in the short-term.