LinkedIn Projections Underwhelm Wall Street

Executives with LinkedIn offered an upbeat assessment of the company's first quarter performance on Thursday, but both analysts and the market were unimpressed.

Shares in the company, which had been trading as high as $265 a little over a week ago, closed Friday at just over $205. Predictions for the stock's performance over the coming year, which had included estimates in the low $300s, were slashed about $250.

The disappointment stemmed not so much from LinkedIn's performance in the first quarter, which overall was about what the company predicted, but instead from the fact that company has relatively modest predictions of 26 percent growth in the next quarter. That would be LinkedIn's lowest quarterly growth rate since going public four years ago, and well below the 35 percent growth that Wall Street analysts predicted.

Positive Trends

During a Thursday conference call with the media, LinkedIn CEO Jeff Weiner offered a glowing assessment of the company's performance.

"During Q1, cumulative members grew 23 percent to 364 million, unique visiting members grew 18 percent to an average of 97 million per month, and member pageviews grew 30 percent, well ahead of unique member growth," Weiner said. "We continue to see a healthy increase in member pageviews per unique visiting member, demonstrating growing organic engagement. In addition, mobile continues to grow at double the rate of overall member activity, and now represents more than half of all traffic to LinkedIn."

LinkedIn's revenues rose 35 percent over the same quarter last year, from $473.2 million to $637.7 million. The company also experienced strong growth in its talent-solutions business, which grew by 36 percent.

A Tougher Second Quarter

LinkedIn CFO Steve Sordello told participants on the conference call that the lower 26 percent growth rate predicted by LinkedIn for the second quarter of the year stemmed from "three incremental factors: 1) changes in...

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