LinkedIn stock (NYSE: LNKD) fell more than 5% after hours, and then bounced back up more than 2%. The networking site reported Q3 earnings today, and investors are confused.
- LinkedIn Stock (NYSE: LNKD) Price Depends on This
- LinkedIn (NYSE: LNKD) Stock Drops 12% on These Key Earnings Figures
- Why LinkedIn (NYSE: LNKD) Is the Dark Horse of Social Media
- LinkedIn’s (NYSE: LNKD) First-Quarter Earnings Preview
- Will LinkedIn Corp. (NYSE: LNKD) Earnings Follow Groupon's Dismal Lead?
LinkedIn Corp. (NYSE: LNKD) stock dipped as much as 12.5% in after-hours trading today (Thursday) after the company announced weaker 2014 guidance figures than most analysts expected.
LNKD is projecting revenue between $455 million and $460 million for the first quarter of 2014. That's well below analysts' estimates of $470 million.
As we've seen in the past few years, not all social media stocks have been successful investments...
Online game-maker Zynga Inc. (Nasdaq: ZNGA) started trading at $10 a share in 2011, then tumbled 7.75% to $9.25 in just four hours of trading. It never recovered, and in June, the company announced it was cutting 520 jobs. Now Zynga shares are trading at $3.69, compared to a high of $14.69.
LinkedIn is expected to report earnings of 9 cents per share on revenue of $179 million. In the same period a year ago, the company broke even with revenue of $94 million.
The question is if the ever-growing and hugely successful professional networking service can sustain the brisk growth that has not only had job seekers and industry experts flocking to the site, but also sent its shares soaring. LinkedIn's stock has climbed nearly 70% this year.
LinkedIn did report commendable fourth-quarter numbers and enjoyed significant revenue growth across all segments. But a prior stellar quarter does not portend the same in a subsequent one.
If first-quarter results are a letdown, shares could plummet.
A Look at LinkedIn (NYSE: LNKD)The Mountain View, CA-based company has enjoyed explosive expansion in its membership. LinkedIn ended 2011 with some 145 million members, up from 90 million at 2010's end.
LinkedIn is becoming a Facebook-type site for career-minded professionals. Helped no doubt by the high and stagnant unemployment rate, the Website drew more than 100 million monthly visitors in January for the first time, research firm comScore Inc. reported.
MarketWatch notes that as more and more employers, headhunters and job seekers congregate to the site, using it as a digital rolodex, LinkedIn benefits from the fees it charges companies, recruiting services and people who opt to pay for additional access to the members.
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.
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 GuidanceLinkedIn 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.