LinkedIn Corp announced strong user growth and better-than-expected third quarter revenue of $393 million on Tuesday, a 56 percent jump from a year ago, but issued a conservative revenue forecast for the fourth quarter and fiscal 2013.
LinkedIn said it expected between $415 million and $420 million in sales for the final three months, lower than the $438 million expected by analysts polled by Thomson Reuters I/B/E/S. Its full-year revenue estimates, although revised upward to $1.5 billion, also fell slightly short of Wall Street’s expectations.
Its shares slid to $236, down 4.5 percent, in choppy after hours trading.
LinkedIn’s dizzying valuation – it is trading at roughly 158 times forward earnings, compared with Facebook’s 70 times and Google’s 23 – has heightened scrutiny on whether the company can maintain its growth streak.
So far, Chief Executive Jeff Weiner has consistently beat quarterly top line targets since taking the company public in 2011 at $45 a share.
In the third quarter, the company earned 39 cents a share, excluding certain items, exceeding the 32 cents expected by analysts. Monthly users rose to 259 million during the quarter, a 38 percent rise from a year ago, LinkedIn said.
By making itself a popular tool for professional recruiters and job seekers who are willing to pay for its services, the company has enjoyed a steady stream of income and avoided the turbulence encountered by free, consumer-facing social networks like Facebook Inc.
But Weiner has signaled in recent months that LinkedIn could eventually reach a saturation point among white-collar workers, particularly in the U.S., and has sought new sources of revenue growth.
LinkedIn in July introduced ads called “Sponsored Updates” to its mobile apps. Earlier this year it acquired Pulse, a popular news reader app, for less than $100 million.
But the company’s aggressive push into mobile has not been without bumps. Security experts this week criticized a new LinkedIn feature called “Intro,” which re-routes a user’s emails through LinkedIn’s servers, as a potential security risk.