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LinkedIn Continues to Surprise the Street, Gives Upbeat Outlook (LNKD)

One of the very few bright spots in rather struggling social media and networking sector, LinkedIn Corp. (NYSE: LNKD) announced fiscal fourth-quarter results late on Thursday—and once again it did not fail to surprise the Wall Street. The Professional networking site, which was founded by former Paypal employees in 2002, comfortably beat analysts’ consensus estimate—for the seventh time in a row.

LinkedIn, which became publicly traded Company in May 2011, reported 60% growth in net income. Shares leaped nearly 9.50% in aftermarket trading.

The Company also provided a very optimistic forecast for the fiscal first quarter. LinkedIn expects revenue to come in the range of $305 million to $310 million, which is higher than analysts’ consensus forecast of $301 million.

For the fiscal fourth quarter, LinkedIn reported net income of $11.5 million, up from $6.9 million, in the year-earlier quarter.

Stripping onetime items, adjusted earnings or non-GAAP earnings came at 35 cents a share, compared to 12 cents a share, in the same period of last year.

Revenue during the period showed a stellar growth. It jumped 81% to $304 million from $168 million, in the year-earlier quarter.

Analysts polled by Thomson Reuters, on average, were expecting earnings of 19 cents a share on revenue of $280 million.

While revenue from the U.S., which accounted for 62% of the total revenue in the fourth quarter, was $189 million, revenue from international markets was $114.6 million.

However, one cause of concern is whether for how long LinkedIn can grow at a brisk pace. With gross margins of almost 90%, LinkedIn continues to remain one of the most profitable companies in the social media sector. But sooner or later, just like any other social networking company, for instance Facebook it might experience falling number of ‘clicks’ or slower pace of user growth.

Now in order to counter inevitable deceleration in user growth, as the company shift from initial growth stage to mature stage, LinkedIn has started to introduce number of features to attract users to its site-for instance, personal blogs by well known entrepreneurs such as Sir Richard Branson, which users can “follow”.



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