Online professional-networking service LinkedIn's fourth-quarter
performance added another line to its sterling resume as a public
company.
The results announced Thursday extended LinkedIn Corp.'s
uninterrupted streak of exceeding analysts' projections for both
earnings and revenue. It marked the seventh consecutive quarter since
LinkedIn's May 2011 IPO that the company has pulled that off, to the
delight of investors.
The run of pleasant surprises is one of the
reasons that LinkedIn's stock has tripled from its initial public
offering price of $45. The shares surged $11.71, or 9.4 percent, to
$135.80 in extended trading after the numbers came out.
Besides a
66 percent increase in earnings from the previous year, the latest
quarter was highlighted by an influx of 15 million accounts to propel
LinkedIn's total membership beyond 200 million. Visitors to LinkedIn's
website also viewed 67 percent more pages than the previous year, an
indication that the company's efforts to add more business news and
career tips from top business executives are paying off.
Wall
Street's embrace of LinkedIn contrasts with the cold response given to
other Internet services that have gone public during the past few years.
Most of them are trading below their IPO prices. The most notable is
Facebook Inc., whose stock is worth about 25 percent less than it was
when it made its market debut in May.
Although both run websites
devoted to connecting people with common interests, LinkedIn and
Facebook are targeting different audiences. Facebook focuses mostly on
letting friends and family share good times and swap stories, while
LinkedIn concentrates on helping people advance their careers and
helping companies fill jobs.
Facebook, which is based in Menlo
Park, is the larger of the two services, with more than 1 billion active
users and $5.1 billion in revenue last year. LinkedIn, which is based
in Mountain View, Calif., has 202 million accountholders and revenue of
$972 million in 2012.
But LinkedIn is growing more quickly, partly
because it's less dependent on advertising than Facebook and most
Internet services. In the fourth quarter, advertising accounted for 27
percent of LinkedIn's revenue. The remainder comes from various tools
that it sells to help recruit workers and glean more insights from the
information that its users post on its website.
Reflecting its
belief that the member data are becoming increasingly valuable, LinkedIn
said Thursday that it intends to raise some prices this year. Setting
up a member profile remains free. The price increase reflects the
additional information that the company has accumulated as its
membership has more than doubled in less than two years, according to
Steve Sordello, LinkedIn's chief financial officer. The company provided
no specifics on the increases.
LinkedIn earned $11.5 million, or
10 cents per share, during the final three months of last year. That
compared to $6.9 million, or 6 cents per share, a year earlier.
If
not for the costs of employee stock compensation and certain other
charges, LinkedIn said it would have earned 35 cents per share. That was
far above the average estimates of 19 cents per share among analysts
surveyed by FactSet.
Revenue soared 81 percent from the previous year to $304 million - about $24 million above analyst forecasts.
LinkedIn's
revenue outlook for the current quarter and all of 2013 were roughly in
line with analyst estimates, setting the stage for the company to clear
those financial hurdles once again.
Management's forecast for
annual revenue of $1.4 billion this year appears conservative, given
that it would translate into an increase of about 45 percent from last
year. In 2012, LinkedIn's annual revenue rose 86 percent.
"We are
trying to utilize a prudent approach to year-over-year growth," Sordello
told analysts during an analyst conference call.