In after hour trading, LinkedIn shares plunged downward Thursday on poor expectations for 2016, even though 4th quarter reports were better than expected. The workplace networking website beat Wall Street estimates for the end of 2015, but the company’s forecast for 2016 was far below expectations. 2015 saw a strong demand for LinkedIn’s hiring and recruiting software but the company’s online advertising software has not taken off as hoped for.
LinkedIn suffered a loss of $8.4 million, when it had experienced a profit of $3 million the year before. Although the company had a powerful finish to the end of 2015, they disappointed many by forecasting an increase of only 55 cents per share for 2016, far below the expected 75 cents per share that analysts were forecasting.
Spokespersons for LinkedIn stated that the lower forecast comes from expected slower growth from their “Talent Solution” division, from which revenues were expected to drop from the current 30 percent to 20 percent, as well as an economic downturn in Europe and Asia. This Mountain View, California, based company also stated that it intends to discontinue its advertising program, “Lead Accelerator” due to higher than expected costs.
LinkedIn receives about 60% of its revenue from recruiters, headhunters, and employers who are seeking qualified individuals to fill employment vacancies. The remainder of the company’s income is derived from advertising and premium subscriptions.
Although the company has seen a steady increase in revenue over the past 5 years, it often reports a general net loss due to large stock grants awarded to employees.
LinkedIn shares were volatile in 2015, taking a huge downward plunge in the spring after the purchase of online education site Lynda.com, then hitting a big upswing in the fall, only to drop once more in the last few months of 2015.
Membership in LinkedIn grew to 419 million in the last quarter, an increase of 19 percent. Company executives are expecting more clients from China and other markets, as well as increased revenue from online training and software sales which allow sales reps to increase contacts from their LinkedIn accounts.
The company does face some stiff competition, however, from companies such as GlassDoor, and even from Facebook, which recently launched a new platform so that workers can find and communicate more easily with co-workers and network with other colleagues.
Source: ABC News
xIn after hour trading, LinkedIn shares plunged downward Thursday on poor expectations for 2016, even though 4th quarter reports were better than expected. The workplace networking website beat Wall Street estimates for the end of 2015, but the company’s forecast for 2016 was far below expectations. 2015 saw a strong demand for LinkedIn’s hiring and recruiting software but the company’s online advertising software has not taken off as hoped for.
LinkedIn suffered a loss of $8.4 million, when it had experienced a profit of $3 million the year before. Although the company had a powerful finish to the end of 2015, they disappointed many by forecasting an increase of only 55 cents per share for 2016, far below the expected 75 cents per share that analysts were forecasting.
Spokespersons for LinkedIn stated that the lower forecast comes from expected slower growth from their “Talent Solution” division, from which revenues were expected to drop from the current 30 percent to 20 percent, as well as an economic downturn in Europe and Asia. This Mountain View, California, based company also stated that it intends to discontinue its advertising program, “Lead Accelerator” due to higher than expected costs.
History
LinkedIn receives about 60% of its revenue from recruiters, headhunters, and employers who are seeking qualified individuals to fill employment vacancies. The remainder of the company’s income is derived from advertising and premium subscriptions.
Although the company has seen a steady increase in revenue over the past 5 years, it often reports a general net loss due to large stock grants awarded to employees.
LinkedIn shares were volatile in 2015, taking a huge downward plunge in the spring after the purchase of online education site Lynda.com, then hitting a big upswing in the fall, only to drop once more in the last few months of 2015.
Membership in LinkedIn grew to 419 million in the last quarter, an increase of 19 percent. Company executives are expecting more clients from China and other markets, as well as increased revenue from online training and software sales which allow sales reps to increase contacts from their LinkedIn accounts.
The company does face some stiff competition, however, from companies such as GlassDoor, and even from Facebook, which recently launched a new platform so that workers can find and communicate more easily with co-workers and network with other colleagues.
Source: ABC News
