The LinkedIn team at the New York Stock Exchange. Credit: LinkedIn.
Shares of LinkedIn (LNKD +0.00%) stock jumped nearly 7% in late trading after reporting better-than-expected fourth-quarter results. Here's a closer look at the final totals versus Wall Street's projections:
| Revenue | YOY Growth | EPS | YOY Growth | |
|---|---|---|---|---|
| Consensus estimate | $617 million | 37.9% | $0.53 | 35.9% |
| Q4 actuals | $643.4 million | 43.9% | $0.61 | 56.4% |
| DIFFERENCE | $26.4 million | 6% | $0.08 | 20.5% |
Sources: S&P Capital IQ and LinkedIn press release.
For the year, LinkedIn reported $2.22 billion in revenue and $2.02 in non-GAAP profit. Analysts tracked by S&P Capital IQ were calling for $2.19 billion and $1.94 a share, respectively.
"The fourth quarter capped another successful year for LinkedIn, which was marked by steady member growth and strong financial results," said Jeff Weiner, CEO of LinkedIn, in a press release. "We continued to make significant progress against a number of multi-year, strategic initiatives including mobile, jobs, content, and global expansion."
The results also mark the fourth-consecutive quarter in which LinkedIn has topped analysts' average profit target by at least $0.04 a share.
What went right: Marketing Solutions put up the best numbers among LinkedIn's three main areas of business, growing revenue 56% year over year as professionals began using the platform to publish their ideas. The site now hosts more than 1 million long-form posts, and adds 50,000 more every week.
What went wrong: Not much. If I had to pick a weak spot, it's on the cash flow statement where fourth-quarter cash from operations ($130.4 million) wasn't enough to cover capital expenditures ($241.6 million). That's nitpicking, though: LinkedIn has almost $2 billion more in cash and liquid securities than it does debt, and even the debt is convertible into stock. The company has more-than-enough capital to reinvest.
What's next: Looking ahead, LinkedIn projects $618 million to $622 million in first-quarter revenue, and $0.53 in adjusted profit. Analysts are targeting $646.5 million and $0.56 a share, respectively. They also see LinkedIn generating 40.54% average annual earnings growth during the next three-to-five years.
