LinkedIn’s 4Q tops analyst views, stock surges to new high

By MICHAEL LIEDTKE
AP Technology Writer

SAN FRANCISCO (AP) — LinkedIn maintained its perfect record of pleasant financial surprises as the online professional networking service extended its reach during the fourth quarter and added more tools to help connect salespeople with potential customers.

The results announced Thursday marked the 15th consecutive quarter that LinkedIn’s earnings and revenue have exceeded analysts’ projections since the Mountain View, California, company went public in May 2011.

The streak has been driven in part by LinkedIn’s cautious approach in the financial forecasts it releases every three months. Many analysts suspect management deliberately sets a low bar so it’s easier to clear. The suspected gamesmanship has prompted some analysts to boost their predictions above LinkedIn’s projections yet the company has still managed to top those numbers every quarter so far.

It’s a habit that investors love. After hitting a new peak during Thursday’s regular trading, LinkedIn’s stock surged another $19.83, or nearly 8 percent, to $257.80 in extended trading.

Not even the latest chapter in LinkedIn’s history of uninspiring guidance could dampen the enthusiasm. The company’s first-quarter predictions envision adjusted earnings of 53 cents per share on revenue of about $620 million, falling shy of adjusted earnings of 55 cents per share on revenue of $646 million predicted by analysts, according to FactSet.

LinkedIn Corp. earned $3 million, or 2 cents per share, during the final three months of last year. That represented a 21 percent decrease from $3.8 million, or 3 cents per share, in the same 2013 period.

If not for certain accounting items, LinkedIn said it would have earned 61 cents per share. That figure exceeded the average estimate of 53 cents per share among analysts surveyed by FactSet.

Fourth-quarter revenue climbed 44 percent from the previous year to $643 million — about $26 million above analysts’ projections.

LinkedIn Corp. ended December with 347 million users who had posted their work histories on the service, a gain of 15 million from September.

More people clocked into LinkedIn, too, and spent more time perusing the career advice shared on its site. A monthly average of 93 million people visited LinkedIn during the fourth quarter, up from 90 million in the third quarter. That trend is a positive sign because it helps LinkedIn gather more insights about its users and sell advertising.

Unlike most Internet services, LinkedIn generates most of its revenue from additional features, tools and access that it sells to other companies and headhunters on the prowl for talented workers.

LinkedIn also has recently started to do more to help companies generate more sales of their products and services. The newest product, called “Sales Navigator,” is attracting more subscribers than LinkedIn anticipated so far, though management didn’t reveal any specific numbers about its growth. LinkedIn believes Navigator can become an indispensable tool in an estimated $10 billion market for sales tips and introductions.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LNKD at http://www.zacks.com/ap/LNKD

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Keywords: LinkedIn, Earnings Report, Priority Earnings

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