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LinkedIn Corp. (NYSE: LNKD) reported earnings today (Thursday) that beat expectations, further distancing it from struggling Groupon Inc. (Nasdaq: GRPN) and raising the bar for competitors.
LinkedIn's revenue for the fourth quarter was $167.7 million, an 105% increase compared to $81.7 million for the same period the year before. That beat The Street estimate of $159.7 million.
LinkedIn Price History
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Net income rose 30% to 6 cents per share or $6.9 million, up from $5.3 million a year ago, according to FactSet. Non-GAAP net income for the quarter was $13.3million or 12 cents per share.
LinkedIn had warned the fourth quarter could result in another loss due to costs of hiring more workers for new projects to grow its subscriber base. LinkedIn, however, usually gives conservative guidance and beats estimates, which it has done for the past few quarters.
LinkedIn Corp. (NYSE: LNKD) Gives Strong Guidance
LinkedIn scored half of total fourth-quarter revenue from hiring solutions, the services used to match up jobs and job seekers. About 30% of the total quarterly revenue came from its marketing business and ad sales, and the remaining 20% from premium subscriptions.
Those business segments' growth rates show their demand in the career networking universe: hiring solutions sales climbed 136%, marketing sales were up 77%, and premium subscriptions grew 87%.
LinkedIn also made strides in its international business, branching into growing markets that will have a bigger need for professional networking. It finalized three offices, one each in Japan, Brazil, and India.
For the current quarter, the company forecasts revenue in a range of $170 million to $175 million, ahead of the average $171 million estimate.
LinkedIn: Not a Groupon
Favorable investor reaction pushed the shares up more than 5% to $80.40 in after-hours trading - a stark difference from the dismal tone Groupon set Wednesday.
Groupon reported earnings Wednesday for the first time since going public in November 2011. It failed to meet The Street's expectations, reporting a net loss before adjustments of $42.7 million, or 8 cents a share. Revenue rose 194% to $506.5 million.
Wall Street expected earnings per share of 3 cents on $475 million in sales.
With profit missing expectations and disappointing investors, Groupon shares fell about 16% Thursday. LinkedIn fell about 3% in early trading but by 3 p.m. neared Wednesday's closing price of $76.54.
LinkedIn Ready to Fight Facebook Add On
LinkedIn has always separated itself from fellow networking site Facebook, by taking a career networking approach. The different themes have kept the two companies from direct competition.
Now another professional connection provider, BranchOut, is trying to compete with LinkedIn - and is using Facebook to get ahead.
BranchOut allows users to connect professionally to millions of Facebook members. When someone signs up for the service, the app puts all of that person's Facebook friends into its database.
BranchOut is trying to shortcut growing its own subscriber base and capitalize on the booming popularity of Facebook - similar to online gamer Zynga Inc. (Nasdaq: ZNGA).
While the site still only has 10 million users compared to LinkedIn's more than 150 million, a connection to superpower Facebook could be a strong lifeline. BranchOut claims its users can reach 300 million people through Facebook.
But besides its established reputation in the professional networking world, LinkedIn has a healthy recruiter return rate. About 87% of recruiters used LinkedIn last year, up from 78% the year before, according to data from a survey conducted by social recruiting platform Jobvite.
With the Facebook IPO in full swing since the company filed papers Feb. 1, the social networking site is getting more attention than ever - but it remains to be seen if that rising tide will lift all boats, like BranchOut.
News and Related Story Links:
- Money Morning:
Buy, Sell or Hold: When to Buy Shares of Facebook
- The Wall Street Journal:
LinkedIn Competitor Branches Out to 300 Million Users
I think this is hilarious. Nice way to prepetuate misinformation. This GRPN loss is not a big deal. Most of their loss came from the one-time tax charge which we won't see again. Synthetically driving down the prices of these successful IPOs, just shows how the establishment bankers are once again getting their panties in a wad over successful businesses they have no control over. Hey old men, the internet is not a fad and it will steamroll you all into your graves no matter how hard you fight against it.