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Strong Financial Report Sends LinkedIn Stock Zooming

by
John Zappe
Feb 9, 2012, 7:09 pm ET

LinkedIn’s financial report released after the New York markets closed this afternoon is sending its stock soaring in after-hours trading as investors reward the company for its galloping growth that the company predicts will continue this year, and at faster rate than Wall Street expects.

LinkedIn closed Thursday at $76.39, down 15 cents. But after investors got a look at the report, the stock climbed up, and within two hours was trading at $83.25, up 9 percent.

The company reported fourth quarter revenue of $167.7 million, more than double its fourth quarter last year. Analysts, who had been expecting the company to finish strong, predicted revenues of $159.7 million. They also expected a 7 cent per share profit. LinkedIn reported earning an adjusted 12 cents per share.

Calling 2011 “A landmark year for LinkedIn,” CEO Jeff Weiner said the company would continue to grow this year, putting an emphasis on expanded mobile capabilities, the international market, and plans to “refresh a number of our pillar products.” Many of those are recruiting related.

Before today’s financial report and an after-market conference call, analysts projected LinkedIn would earn 57 cents a share on revenue of $828.2 million. Now, the company says it expects revenue in a range of $840-$860 million. For 2011, LinkedIn’s revenue totaled $522.1 million.

Recruitment provided half the revenue for 2011 and just over half in the last quarter of the year. The relative percentages that LinkedIn’s three product lines — recruitment, marketing, and subscriptions — contribute to the total revenue haven’t changed much since the company went public last May.

During the question and answer with analysts, Steve Sardello, LinkedIn’s CFO, said there won’t be “a lot of change” in recruitment pricing this year. Instead, the company will focus on expanding its client base and improving the penetration of the service. He said the renewal rate and add-ons grew by 171 percent, and said most customers now hold between three and four recruiter seats.

LinkedIn has been focusing increasing attention on the international market, and growth there has been slowly edging up. By the end of 2011 it accounted for a third of LinkedIn’s quarterly revenue. During the quarter the company opened offices in Brazil, India, and Japan, and translated the service into five additional languages.

LinkedIn’s optimistic outlook for this year is in marked contrast to at least two of its competitors. In the last two weeks both Monster and Dice Holdings offered financial guidance that was more conservative than what Wall Street wanted to hear. As a result, the stock of both companies saw a sharp decline.

CareerBuilder, privately held by three media companies and Microsoft, said it had North American revenue of $157 million in the fourth quarter, bringing the total to $627 million. The company publicly releases only revenue for North America. It does not release international earnings or expenses or profit.

However, Gannett’s CEO Gracia Martore told investors and analysts that CareerBuilder accounted for 82 percent of the company’s digital revenues. That revenue, the company said, was $181.5 million in the 4th quarter. She also said international revenue was up 40 percent for the job board.

If the four owners of CareerBuilder share its income in proportion to their ownership percentage of its stock, then CareerBuilder contributed $148.8 million to Gannett. (The company owns 50.8 percent of CareerBuilder.) From that figure, it’s possible to conjecture CareerBuilder had a $293 million quarter, putting it ahead of Monster. Company officials declined to comment on the figures.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Morgan Hoogvelt

    Congrats LinkedIn on continued strong performance. Although many question and doubt LinkedIn’s long term success, I think LinkedIn will continue to be a leader in the recruiting/branding space for years to come and although Facebook may challenge, it will be hard for them to beat LinkedIn.

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