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LinkedIn reaches highest level since IPO on profit, sales

May 04, 2012|Bloomberg News

LinkedIn Corp., the biggest professional-networking website, rose to the highest price since its market debut after reporting first-quarter sales and profit that beat analysts' estimates amid a jump in membership.

LinkedIn advanced 8.9% to $118.88 at 6:50 a.m., the highest level since it listed on the New York Stock Exchange in May 2011. The shares have more than doubled since then.

LinkedIn said membership increased to 161 million from 150 million in the fourth quarter. Chief Executive Jeff Weiner is pushing mobile technology to woo more professionals to its subscription services and attract advertisers who want to reach the growing user base.

"Since they've been public, they've outperformed," said Kerry Rice, an analyst with Needham & Co. in New York.

Sales more than doubled to $188.5 million, topping the $178.4 million average estimate of analysts, according to data compiled by Bloomberg.

Profit rose to $5 million, or 4 cents a share, from $2.08 million, or 0 cents, a year earlier, the company said Thursday in a statement. Analysts projected break- even earnings. The company also agreed to buy SlideShare Inc., a professional content-sharing site, for about $118.8 million.

Profit excluding some items increased to 15 cents a share from 6 cents a year earlier, beating the average analyst estimate of 9 cents. Sales this year will be $880 million to $900 million, the Mountain View, Calif.-based company said. That's more than the $876.7 million predicted by analysts and raised from an earlier company forecast of $840 million to $860 million.

Revenue in the second quarter will be $210 million to $215 million, compared with the $208.4 million estimated by analysts. Mobile is the company's fastest-growing service, Weiner said Thursday on a conference call following results.

Even as profit rose, costs soared 92% to $177.8 million. Sales and marketing was the largest expense at $65.9 million, followed by product development at $47.1 million. LinkedIn added 331 employees in the first quarter, Weiner said.

The company will pay for SlideShare, which was founded in October 2006 and had almost 29 million unique visitors in March, with about 45% cash and 55% stock, LinkedIn said in a statement. LinkedIn has made at least five acquisitions in the past two years, data compiled by Bloomberg show.

"SlideShare is used by professionals primarily to share presentations, which fits nicely with LinkedIn's professional focus," said Rice, who recommends investors hold LinkedIn shares. "It's a popular app on LinkedIn already."

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