LinkedIn Gives Positive Outlook
April 28 2016 - 4:54PM
Dow Jones News
By Deepa Seetharaman
LinkedIn Corp. said its loss widened in the first quarter, but
it gave favorable guidance for its second quarter and boosted its
full-year outlook, a contrast from its prior report when a downbeat
forecast cut the company's value nearly in half.
Shares added 8.8% after hours to $133.89.
The professional online network said revenue rose 35% to $860.7
million, from $637.7 million a year earlier. Analysts expected
LinkedIn to report first-quarter revenue of $828.5 million,
according to Thomson Reuters.
LinkedIn reported a loss of $45.8 million, or 35 cents per
share, compared with $42.5 million, or 34 cents per share, a year
ago.
Excluding stock-based compensation and some other expenses,
LinkedIn said it earned 74 cents per share, compared with 57 cents
per share on that basis a year earlier. Analysts expected LinkedIn
to report adjusted earnings of 60 cents.
For the second quarter, LinkedIn said it anticipates earnings of
74 cents to 77 cents a share, above analyst expectations for 71
cents. Revenue is expected to come in between $885 million and $890
million, straddling analyst estimates for $886 million.
The company also boosted its outlook for the full year, saying
it now expects revenue between $3.65 billion and $3.7 billion and
adjusted earnings of $3.30 to $3.40 a share. It had previously
forecast revenue of $3.6 billion to $3.65 billion and adjusted EPS
of $3.05 to $3.20 a share.
In February, LinkedIn issued a disappointing financial outlook
for 2016, sparking a 44% one-day share plunge that wiped out more
than three years of stock market gains. The projection reflected a
slowdown in its higher-margin online sales business, economic
pressures overseas and a decision to shelve an ad product,
executives said. LinkedIn shares are up slightly since then, but
remain down 45% for the year as of Thursday's close.
Roughly two-thirds of LinkedIn's revenue comes from its talent
solutions division, which helps recruiters identify job candidates.
The company generated $502.4 million in revenue from the unit,
which caters largely to corporate clients, compared with $396
million a year ago.
The disappointing outlook in February and sharp stock slide also
triggered investor concerns over LinkedIn's reliance on stock-based
compensation to recruit employees.
Over the past two years, LinkedIn's stock-based compensation has
accounted for 16% of revenue-less than Twitter Inc.'s 39%, but
about double Facebook Inc.'s 8%, according to RBC Capital Markets.
At a conference in February, LinkedIn Chief Financial Officer Steve
Sordello said LinkedIn's goal was to drive this ratio down to
10%.
One bright spot were native ads or "sponsored content" that
appears within users' LinkedIn feeds. This was one of the company's
fastest-growing ad products last year and is recorded within
LinkedIn's Marketing Solutions division, which focuses on
advertising.
LinkedIn said revenue in the marketing solutions unit rose to
$154.1 million, from $119 million a year ago.
At the company's third business unit, premium subscriptions,
revenue rose to $148.9 million, compared with $122 million last
year.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
April 28, 2016 16:39 ET (20:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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