LinkedIn finished last year with a solid financial performance, but the online professional networking service rattled already jittery investors, with a forecast indicating that its growth is slowing more than investors envisioned.
The projection released Thursday, along with LinkedIn Corp.’s fourth-quarter results, triggered a 7 percent drop in the company’s stock price, during extended trading.
LinkedIn also announced it is spending $120 million to buy Bright, a startup that specializes in making data-analysis tools that can be used to connect job hunters with employers.
The late sell-off in LinkedIn’s stock came a day after Twitter Inc., another internet service that connects people with common interests, let down Wall Street with a jarring slowdown in its user growth. Twitter only added 9 million users during the final three months of last year, well below its quarterly average of 16 million additional users during the previous year.
LinkedIn is persuading more people to set up accounts and share their job histories at the same pace that it has been.
Another 18 million accounts were set up in the fourth quarter, extending LinkedIn’s reach to 277 million users through December. That matched the average of additional accounts that LinkedIn gained in the previous four quarters.
But LinkedIn’s projections raised worries that the company is starting to have more trouble mining its growing audience for more revenue.
Management predicted revenue of $455 million to $460 million during the first three months of this year, below the average estimate of $471 million among analysts surveyed by FactSet.
The company’s stock plunged $16.50 to $206.95, in extended trading.
LinkedIn delivered fourth-quarter earnings, and revenue topped analyst estimates.
The Mountain View, Calif., company earned $3.8 million, or 3 cents per share. That was down 67 percent from $11.5 million, or 10 cents per share, a year earlier.
If not for certain expenses, LinkedIn said it would have earned 39 cents per share – a penny above analyst projections.
Revenue climbed 47 percent from the previous year, to $447 million. Analysts had anticipated revenue of $438 million.