LinkedIn Blows Past Analyst Earnings Expectations for Fourth Quarter

Andrew Klips |

Social Media IPOLinkedIn Corp. (LNKD) said after Thursday’s closing bell that profit and sales roared in the fourth quarter of 2012, far exceeded analyst expectations with new products and growing membership expanding earnings.

The world’s largest professional network on the Internet reported fourth-quarter revenue of $303.6 million, up 81 percent from $167.7 million in the year prior quarter.  Net income leapt to $11.5 million, or 10 cents per share, a 67 percent jump from $6.9 million, or 6 cents per share, in the fourth quarter of 2011.  Non-GAAP net income, which excludes tax-affected stock-based compensation expense and tax-affected amortization of acquired intangible assets, rose to $40.2 million, 35 cents per share, in the latest quarter from $13.3 million, or 12 cents per share, in the year earlier period.

The earnings crushed Wall Street predictions of non-GAAP earnings of 19 cents and the revenue total exceeded estimates of $280 million.

Calling 2012 a “transformative” year, LinkedIn chief executive Jeff Weiner said, "We exited 2011 having successfully revamped our underlying development infrastructure. Based on that investment, we said that 2012 would be a year of accelerated product innovation, and it was. The products we delivered throughout the year drove member engagement and financial results to record levels in the fourth quarter."

Dialing-in on fourth-quarter 2012 results, LinkedIn’s Talent Solutions business, which are tools for corporate recruiters, increased by 90 percent from Q4 2011 to $161.0 billion.  Its Marketing Solutions arm, which is mostly advertisements, grew 68 percent from the year prior quarter to $83.2 million.  Premium subscriptions to LinkedIn increased by 79 percent to $59.4 million.

At the end of 2012, LinkedIn had about 202 million users, a 39 percent increase from the year prior.  The Mountain View, California-based company said that it is adding new members at the rate of about two per second.  Overall page views, including those from mobile devices, swelled by 67 percent in the fourth quarter.

For the full year 2012, revenue increased 86 percent to $972.3 million from $522.2 million.  GAAP diluted EPS increased to 19 cents from 11 cents and Non-GAAP diluted EPS increased to 89 cents from 35 cents.  Adjusted EBITDA increased to $223.0 million from $98.7 million.

Looking forward, LinkedIn said that it expects revenue in the range of $305 million to $310 million in the first quarter of 2013.  For the full 2013 year, revenue is expected to range between $1.41 billion and $1.44 billion.

Shares of LinkedIn closed the regular trading session on Thursday at $124.09, down 1.34 percent for the day, but took-off in extended trading with the earnings report to as high as $136.20.  That puts shares at an all-time high since the company went public in May 2011 with an IPO price of $45 per share.

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Symbol Name Price Change % Volume
LNKD LinkedIn Corporation Class A 188.63 -0.66 -0.35 734,043
SBLKF null n/a n/a n/a 0


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