LinkedIn's hot streak riding on 4Q earnings report

LinkedIn's 4th-quarter earnings report could extend company's pattern to topping Street views

Associated Press

SAN FRANCISCO (AP) -- LinkedIn Corp.'s fourth-quarter earnings report could reveal whether the online professional networking service's credentials are still impressive enough to remain a hot commodity on Wall Street.

WHAT TO WATCH FOR: The bar has been set high for LinkedIn, which is scheduled to release its results Thursday after the stock market closes. The company has spoiled investors by topping analysts' projections in every quarter since its initial public offering in May 2011.

That means LinkedIn will need to keep the streak by exceeding analysts' estimates for a seventh consecutive quarter to support its stock price. Investors appear confident that the company will pull it off. The stock hit a new high of $127.45 in late January, and is still hovering near there. The shares closed Monday at $123.30. That represents a hefty gain for investors who bought LinkedIn's stock at its IPO price of $45 and have held it.

LinkedIn's market value of about $13 billion is propelled by the company's rapid growth, as more people around the world share information about their careers and aspirations on its free service. The Mountain View, Calif., company makes most of its money by selling subscriptions to employers, headhunters and others broader access to LinkedIn's database. Online advertising also brings in revenue.

Shortly after the new year began, LinkedIn disclosed that it surpassed 200 million accountholders for the first time. That's more than double the total of less than two years ago. The fourth-quarter earnings report will show how many accountholders LinkedIn had at the end of December. It could be slightly below 200 million. LinkedIn ended September with 187 million members.

The report for the final three months of last year also could provide further insights into LinkedIn's recent efforts to lure people into visiting its website more frequently and linger for longer periods of time. Among other things, LinkedIn has redesigned its website to enliven user profiles, added more business news and recruited top executives and entrepreneurs to provide advice in recurring blog posts.

If checking into LinkedIn becomes more habitual for the people who use it, it will be easier for the company to sell more advertising.

WHY IT MATTERS: LinkedIn is playing an increasingly important role in the economy as it changes the way that people find jobs and the way that employers fill them.

WHAT'S EXPECTED: Analysts are forecasting earnings of 19 cents per share on revenue of $280 million, according to FactSet. The earnings forecast doesn't include the company's expenses for employee stock compensation.

LAST YEAR'S QUARTER: The company earned $6.9 million, or 6 cents per share, on revenue of $168 million during the same 2011 period. Profit would have been 12 cents per share if not for the costs of employee stock compensation and charges unrelated to its ongoing business.

Rates

View Comments (1)