LNKD reports after the close on Thursday. A preview:
LinkedIn's 4Q to provide more networking insights
Investors look to LinkedIn's 4Q results to keep good vibes flowing for online networking
Associated Press
February 8, 2012
SAN FRANCISCO (AP) -- LinkedIn Corp.'s fourth-quarter earnings should provide some insights into how much employers have been relying on the online professional networking service to fill jobs as the pace of hiring has been accelerating in recent months.
WHAT TO WATCH FOR: The results, due out after the stock market closes Thursday, come at a time of escalating investor excitement about Internet services that bring together people with common interests. Facebook Inc., the owner of the largest social network, triggered the latest outbreak of giddiness last week when it revealed details of its rapid earnings and revenue growth in documents filed for an initial public offering of stock.
Now, it falls upon LinkedIn to keep the good vibes flowing. The economy seemed to be working in LinkedIn's favor during the final three months of the year.
Government labor statistics already have showed companies have been expanding their payrolls, a trend that bodes well for LinkedIn because its website has emerged as a digital rolodex that headhunters peruse to find prospective job candidates.
LinkedIn, which is based in Mountain View, Calif., gets more than two-thirds of its revenue from fees it charges companies, recruiting services and other people who want broader access to the profiles and other data on the company's website. The rest comes from advertising.
The improving economy, coupled with the publicity that LinkedIn has attracted since it completed its own IPO last May, may be spurring more people to post their resumes on the professional networking service.
LinkedIn ended September with 131 million members. Management didn't predict how many more would join LinkedIn during the fourth quarter. Susquehanna Financial Group analyst Herman Leung expects LinkedIn to report it ended the year with about 147 million members.
WHY IT MATTERS: The company's performance will likely sway investors' opinions about young Internet companies trying to prove they have built solid business foundations. LinkedIn has passed the test so far by delivering steady revenue and member growth. It also has been making money with the exception of last year's third quarter when it spent more on new equipment and employees. The performance has kept LinkedIn's stock well above its IPO price of $45. The shares closed Tuesday at $77.77.
WHAT'S EXPECTED: Analysts polled by FactSet expect LinkedIn to earn 6 cents per share, excluding certain items unrelated to the company's ongoing operations. Revenue is projected to be nearly $160 million.
LAST YEAR'S QUARTER: LinkedIn earned $1.6 million, or 3 cents per share, on revenue of $81.7 million at the same time in 2010.
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