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Q2 2012: LinkeIn had strong revenues. Stock jumps.
LinkedIn
had strong revenue in the second quarter thanks to growth from ads and the fees
it charges for deeper access to its vast trove of professional profiles.
Although
net income fell because the company is spending more to grow, revenue increased
faster than expected. The company also raised its forecast for the full year.
LinkedIn's
stock increased after the results came out Thursday, a reprieve after tepid news
from other newly public Internet companies - namely Facebook and Zynga.
LinkedIn, which went public more than a year ago, is among the best-performing
of the newly traded companies, with its stock trading at more than twice the
level of its IPO price at a time when Facebook is nearing half.
The
results indicate that LinkedIn is playing a greater role in the employment
market as millions more people look to find jobs and network online if they do
have jobs. LinkedIn said it had 174 million members at the end of June, up 50
percent from a year earlier. Most of the growth in the second quarter came from
overseas as LinkedIn continued to expand outside of the U.S.
LinkedIn
gets more than two-thirds of its revenue from fees it charges companies,
recruiting services and anyone who wants broader access to the profiles and
other data on its site. The rest comes from advertising.
LinkedIn,
like Facebook, is at the beginning stages of making money from its mobile
applications. CEO Jeff Weiner said in a conference call with analysts that
LinkedIn launched its first mobile ad test at the end of June, when large
corporations such as Shell started running advertisements on LinkedIn's iPad
application. He called the early signs "positive."
LinkedIn
Corp. earned $2.8 million, or 3 cents per share, in the second quarter. That's
down 38 percent from $4.5 million, or 4 cents per share, a year earlier.
Adjusted
earnings, which exclude stock compensation expenses and other items, were $18.1
million, or 16 cents per share, matching analysts' expectations. Last year,
LinkedIn had adjusted earnings of $10.8 million, or 10 cents per share.
Revenue
increased 89 percent to $228 million, from $121 million. Analysts had expected
lower revenue of $216 million, according to FactSet.
LinkedIn,
which is based in Mountain View, Calif., continued to invest in its business
during the quarter, hiring 414 employees to bring the total to more than 2,800
worldwide.
Overall, marketing, development and other expenses increased 93
percent to $215 million, from $111 million a year earlier.
For the
current quarter, LinkedIn said it expects revenue of $235 million to $240
million. Analysts were expecting $236 million.
The
company raised its full-year guidance. It now expects revenue of $915 million
to $925 million, up from the prior range of $880 million to $900 million.
Analysts had expected $907 million.
LinkedIn's
stock climbed $3.84, or 4.1 percent, to $97.35 in after-hours trading. The
stock had closed down $2.13, or 2.2 percent, to $93.51.
By
contrast, Facebook's stock fell below $20 on Thursday for the first time since
going public in mid-May, when the stock priced at $38. It closed at $20.04.
Unlike LinkedIn, Facebook disappointed investors with its first earnings report
as a public company last week, and the stock has been falling since.
Zynga,
the online game maker, has had its stock battered by investors in recent
months. Its shares are down 73 percent from their $10 IPO price amid worries
about its ability to keep growing revenue from its games, which are played
mostly on Facebook.
Meanwhile,
Yelp Inc., the online reviews site, has been another bright spot. Its revenue
grew 67 percent in the latest quarter, to $32.7 million, surpassing Wall
Street's expectations. Its stock closed nearly 17 percent higher on Thursday,
at $22. That's up nearly 47 percent from its March IPO price of $15.
AP.
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