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Muted Forecasts Prove a Wet Blanket For LinkedIn (LNKD)

Stocks in this article: LNKD

NEW YORK (TheStreet) -- LinkedIn (LNKD) shares shed 4.2% to $236.80 in pre-market trading after issuing muted forecasts for year's end. The professional social network said it expects revenue in the range of $415 million to $420 million for the fourth quarter, $18 million less than expected by analysts surveyed by Thomson Reuters.

Steven Sordello, CFO, said comparatively fewer product launches than the fourth quarter 2012 will yield lower page views.

"At the end of last year, we released more new product than during any similar timeframe in the company's history," he said during a conference call. "Relative to last year's performance, we expect this quarter's sequential page view seasonality to track more closely to what we saw in fourth quarter of 2011."

Despite conservative fourth-quarter forecasts, third-quarter results impressed analysts. Earnings of 39 cents a share beat an expected 32 cents a share, and revenue of $393 million was 56% higher than a year earlier, surpassing estimates by $7.6 million. The Mountain View, Calif.-based company averaged 142 million monthly unique visitors during the quarter, a 30% year-over-year increase.

"Continued innovation in strategic areas such as mobile, students and LinkedIn as a professional publishing platform, as well as ongoing improvements to the core products resulted in increased member growth and engagement," said CEO Jeff Weiner during the call.

TheStreet Ratings team rates LinkedIn Corp as a Sell with a ratings score of D+. The team has this to say about their recommendation:

"We rate LinkedIn Corp (LNKD) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The area that we feel has been the company's primary weakness has been its disappointing return on equity."

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