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LinkedIn and Tableau: Is Falling Stock Due to Weak Guidance?

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LinkedIn revenues in 4Q15

On February 4, 2016, LinkedIn (LNKD) announced its 4Q15 results and reported revenues of $862 million, a rise of 34% YoY (year-over-year). Revenues for 2015 also rose 35% YoY to $3.0 billion.

Shares of LinkedIn fell 30% in after-hours trading following the results. It forecast a weaker-than-expected 2016. CEO (chief executive officer) Jeff Weiner stated, “Our strategy in 2016 will increasingly focus on a narrower set of high value, high impact initiatives with the goal of strengthening and driving leverage across our entire portfolio of businesses. Our road map will be supported by greater emphasis on simplicity, prioritization, and ultimate ROI and investment impact.”

LinkedIn (LNKD) has forecast revenues of $820 million and EPS (earnings per share) of $0.55 for 1Q16. Analysts, however, expect revenues of $867 million and EPS of $0.74 for 1Q16.

For 2016, the online networking company expects revenues between $3.6 billion and $3.7 billion, with EPS between $3.05 and $3.20. This is significantly below analysts’ revenue estimates of $3.9 billion and EPS estimates of $3.67.

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Tableau’s 4Q15 revenues

On February 4, 2016, Tableau Software (DATA) announced its 4Q15 results. Tableau reported revenues of $202.8 million, a rise of 42% YoY (year-over-year) compared to 4Q14. Its diluted GAAP (generally accepted accounting principles) net loss per share for 4Q15 was $0.57, whereas its non-GAAP EPS stood at $0.33.

Tableau projected revenues for 2016 of $830–$850 million, lower than its previous forecast of $845–$865 million. EPS is expected to be $0.22–$0.35. In comparison, analysts expect revenues of $849.0 million and EPS of $0.55 for 2016.

Tableau’s share price fell by 49% to $41.33 on February 5, 2016, on bleak earnings guidance for 2016. Shares of peer companies Splunk (SPLK) and Salesforce.com (CRM) also fell by 23% and 13%, respectively.

LinkedIn accounts for 4.3% of the First Trust Dow Jones Internet ETF (FDN).

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