LinkedIn beats Q1 earnings expectations, optimistic for Q2

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LinkedIn posted solid first-quarter results that blew away expectations on revenue and earnings. In addition, the professional networking site unveiled a $118.8-million acquisition of SlideShare, a professional content sharing site, in cash and stock. The deal will include about 45% cash and about 55% stock, and is expected to be completed in the second quarter.

Excluding one-time items, LinkedIn's first quarter earnings came in at $0.15 a share, easily beating forecasts for $0.09 a share. Revenue doubled to $188.5 million, topping the Street’s view of $178.6 million, helped mainly by strong performance from its three product lines. Revenues from hiring solutions products jumped 121% to $102.6 million, while marketing solutions products advanced 73% to $48 million. Premium subscriptions products revenues surged 91% to $37.9 million.

Looking ahead to the second quarter, LinkedIn expects revenues in a range of $210-215 million, ahead of analysts’ estimate of $207 million. The company also raised its revenue guidance for fiscal 2012 to a range of $880-900 million from the prior estimate of $840-860 million. In response to the upbeat numbers, Canaccord Genuity Technology Analyst Michael Graham raised his EPS estimate for 2012 from $0.67 to $0.72. Graham believes LinkedIn's member base represents a defensible asset that is generating strong operating momentum.

LinkedIn (LNKD : NYSE : US$117.30), Net Change: 7.89, % Change: 7.21%, Volume: 10,552,483

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

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