LinkedIn needs new friends after disappointing first quarter

LinkedIn has just been endorsed for a new skill: scaring Wall Street.

The professional networking site warned Thursday that the current quarter’s revenue will sorely miss analysts’ expectations — a whiff that sent its shares plummeting more than 25 percent in after-hours trading.

The ugly outlook lopped nearly $7 billion off LinkedIn’s market cap, as it surprised analysts who had grown used to steady results from the Mountain View, Calif., company.

Foremost among the victims was LinkedIn founder Reid Hoffman, whose 14.7-million-share stake saw a paper loss of as much as $1 billion late Thursday, when the shares were briefly down 27 percent.

After a late Thursday conference call, the stock recovered to change hands at around $199, or 21 percent below where it closed regular trading at $252.13.

On the call, LinkedIn CEO Jeff Weiner blamed the warning mainly on a strong dollar that’s hurting returns from overseas operations to the tune of $50 million this year.

Execs also cited sales disruptions as LinkedIn integrates its $1.5 billion acquisition, made earlier this month, of job-skills training site Lynda.com.

But the networking company also admitted it has seen a “secular shift away” from its traditional display advertising business, which saw a “steeper deterioration” in the most recent quarter, especially in Europe.

Likely adding to investor concerns, LinkedIn failed to update its user numbers for the quarter. Instead, it merely repeated boilerplate from the previous quarter that its user ranks total “over 350 million.”

Indeed, the carnage was the latest in a tough week for social-networking sites, which face mounting concerns that growth in their user bases — a crucial measure of their potential to generate advertising revenue in the long run — is losing momentum.

A similar warning Tuesday from Twitter sent its shares tumbling nearly 30 percent.

And earlier Thursday, shares of reviews site Yelp lost 23 percent after its user-growth numbers disappointed analysts.

For the second quarter, LinkedIn forecasts revenue of $670 million to $675 million. Analysts, on average, were expecting revenue of $717 million.

For 2015, LinkedIn sees revenue of about $2.9 billion, short of its February forecast of $2.93 billion to $2.95 billion.

The warning and stock sell-off came despite better-than-expected first-quarter revenues and adjusted earnings that met analysts’ forecasts.

Including costs from stock-based compensation, LinkedIn reported a wider first-quarter loss of $42.5 million, or 34 cents per share, compared with a loss of $13.4 million, or 11 cents per share, a year earlier.

Revenue rose 35 percent to $638 million.