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Will LinkedIn (LNKD) Beat Earnings?

Zacks Equity Research

LinkedIn Corp. (LNKD) is slated to report its second-quarter 2013 results on Aug 1, 2013. In the last quarter, it posted 340.0% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

LinkedIn delivered decent first-quarter 2013 results, with earnings per share of 22 cents comprehensively beating the Zacks Consensus Estimate of 5 cents. The company also witnessed substantial increase in revenues, with all business segments contributing meaningfully and operating income increasing significantly from the year-ago quarter.

LinkedIn is mostly benefiting from the Talent Solution and Premium Subscription businesses. The company has gained customers over the years and has grown steadily.

However, operating costs increased in the reported quarter but the operating profitability increased due to higher revenue. Apart from this, the company faces stiff competition in the professional networking space.

Earnings Whispers?                                       

The Zacks Consensus Estimate for the second quarter stands at 4 cents per share while that for fiscal 2013 stands at 34 cents.

LinkedIn missed estimates in the year-ago quarter, but beat in the last three quarters, which resulted in an average positive surprise of 350.0% in the preceding four quarters.

Looking ahead to the upcoming quarter, as well as the fiscal year, we see no estimate revisions in the last 30 days. As a result, the Zacks Consensus Estimate for both periods have remained unchanged during this time period. The stock carries a Zacks Rank #2 (Buy).

We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements:

  • Earthlink Inc.(ELNK), which has Earnings ESP of +33.33% and carries a Zacks Rank #1 (Strong Buy).
  • InvenSense Inc. (INVN) with Earnings ESP of +8.33% and a Zacks Rank #2 (Buy).
  • Gartner Inc. (IT), with Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).

Read the Full Research Report on LNKD

Read the Full Research Report on IT

Read the Full Research Report on ELNK

Read the Full Research Report on INVN

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