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LinkedIn Earnings Not Enough for Wall Street

LinkedIn Shares Fall 9 Percent After Earnings Report

May 19, 2011: Linkedin CEO Jeff Weiner and Reid Garrett Hoffman during IPO at NYSE | Photo by Tom Fox/Getty Images

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Just six months ago, LinkedIn impressed Wall Street with a blockbuster IPO. But its third quarter earnings, just the second earnings report since its public debut, failed to keep up investor confidence.

Although the company reported increases across all of its revenue streams and healthy membership growth, shares in LinkedIn dropped 9 percent in after-hours trading to $79.60.

For the third quarter, the company said revenue increased, year over year, to $139.5 million, above analysts’ estimated $127.35 million, according to Yahoo Finance. It also said membership grew to 131.2 million, up 63 percent from the same quarter last year.

“LinkedIn had a strong third quarter, with significant, broad-based growth across all of our revenue streams, member engagement metrics, geographies, and sales channels,” said Jeff Weiner, CEO of LinkedIn, in a statement. “Our results underscore the long-term strength of our global platform and our business model.”

But the company also reported a net loss of $1.6 million, compared to net income of $4 million in the third quarter of 2010. While the net loss of 2 cents a share was still less than the loss of 4 cents a share expected by analysts, it was a disappointment compared to its profit of 2 cents in 2010.

Although the company declined to elaborate on this, it said it filed documents with the SEC to sell $100 million worth of more stock.

Despite the financial losses in the last quarter, LinkedIn raised its revenue guidance for the fourth quarter and highlighted several achievements, including the acquisition of two companies, new offices in Germany and Japan and several new features that are boosting engagement on the site. 

One of the brightest areas for the company is its mobile growth, Wiener said. Mobile page views have climbed 400 percent year over year and account for more than 12 percent of total unique visits in the quarter.

“We’re starting to roll up our sleeves and think through how we’re going to monetize mobile,” he said. “[It’s] something we’re hoping to begin next year.”