The 10-second takeaway
For the quarter ended Sep. 30 (Q3), LinkedIn beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew.
Gross margins increased, operating margins dropped, net margins grew.
LinkedIn recorded revenue of $252.0 million. The 23 analysts polled by S&P Capital IQ looked for sales of $244.2 million on the same basis. GAAP reported sales were 81% higher than the prior-year quarter's $139.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.22. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.12 per share. GAAP EPS were $0.02 for Q3 compared to -$0.02 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 86.6%, 240 basis points better than the prior-year quarter. Operating margin was 2.4%, 90 basis points worse than the prior-year quarter. Net margin was 0.9%, 200 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $273.1 million. On the bottom line, the average EPS estimate is $0.15.
Next year's average estimate for revenue is $934.7 million. The average EPS estimate is $0.59.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 335 members out of 1,221 rating the stock outperform, and 886 members rating it underperform. Among 333 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 64 give LinkedIn a green thumbs-up, and 269 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on LinkedIn is outperform, with an average price target of $125.90.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of LinkedIn. Motley Fool newsletter services recommend LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.