Investors cautious ahead of LinkedIn earnings

Investors cautious ahead of LinkedIn earnings
The professional networking site LinkedIn is expected to post sharply higher second-quarter earnings and revenue when it posts results after the market closes Thursday.

Analysts, on average, are expecting earnings of 16 cents per share on revenue of $215.8 million, according to a poll by FactSet. LinkedIn earned 4 cents per share on revenue of $121 million in the year-ago quarter. Adjusted earnings, which compare with analyst expectations, were 10 cents per share.

Citi Investment Research analyst Mark Mahaney thinks Wall Street's estimates are "ballpark reasonable," but with limited chances of getting beat. He also thinks that revenue growth will decelerate, to about 78 percent year-over-year. In the second quarter of 2011, revenue more than doubled.

After a string of disappointing reports from other Internet and social media sites, investors appeared wary Thursday. Shares slipped 14 cents to $95.50, when most tech stock moved higher. Technology stocks were the biggest gainers on the Standard & Poor's 500 index.

LinkedIn was the first of the current crop of social networking companies to go public more than a year ago, and it's been among the best performing. Facebook Inc.'s IPO flopped and shares hit a new low Thursday, a regular occurrence of late. Online game maker Zynga is having a lot of trouble convincing investors that it business is worth investing in, with its stock down 72 percent from its $10 IPO price.

One thing that may be weighing on LinkedIn is a massive security breach in which users passwords were stolen and millions appeared to be leaked online in June.

"The password breach could drive up costs slightly," said Susquehanna analyst Herman Leung, putting estimates at $2 million to $5 million.

Yet shares of LinkedIn Corp. have more than doubled since going public. Its revenue has seen steady growth, though it posted a loss in the third quarter of last year because of increasing investments in its business.

Shares of LinkedIn fell $2.22, or 2.3 percent, to $93.42 in midday trading. The stock has traded in the range of $55.98 and $120.63 in the past 52 weeks.


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