LinkedIn stock slides as guidance falls short

Company posts 39 cents a share on $393M in revenue, beating estimates but not good enough

Shares of LinkedIn are down over 4% in after-hours trading Tuesday, even though the company posted than expected third-quarter earnings. 

The reason for the fall seems to have been weaker than expected guidance for the fourth quarter and full year. The stock had gone up 1.70%, or $4.14, to $247.14 a share in regular trading earier in the day.

In the earnings report, LinkedIn posted non-GAAP earnings per share of 39 cents on revenue of $393 million, up 56% from  $252 million in the year-ago period. Analysts had been projecting EPS of 32 cents a share on revenue of $385 million.

Net loss for the quarter was $3.4 million, compared to net income of $2.3 million for the third quarter of 2012. Non-GAAP net income for the second quarter was $46.8 million, compared to $25.1 million for the third quarter of 2012.

Adjusted EBITDA for the third quarter was $92.8 million, or 24% of revenue, compared to $56.0 million for the third quarter of 2012, or 22% of revenue.

LinkedIn also beat its own expectations. In previous its earnings report, LinkedIn had projected revenue in the range of $367 million and $373 million for the third quarter, while adjusted EBITDA was expected to range between $81 million and $83 million.

“Increased member growth and engagement helped drive strong financial results in the third quarter,” Jeff Weiner, CEO of LinkedIn, said in a statement. “We continue to deliver value to professionals through investment in core products and strategic initiatives such as mobile, students, and the professional publishing platform.”

Talent Solutions took in $224.7 million, or 57% of total revenue, up 62% from a year ago, when it accounted for 55% of total revenue.

Revenue from Marketing Solutions was $88.5 million during the quarter, an increase of 38% year-to-year. It accounted for 23% of total revenue, compared to 25% in Q3 2012.. Premium Subscriptions brought in 20% of total revenue, or $79.8 million, up 61% year to year.

A total of $245.3 million, or 62% of LinkedIn’s revenue, came from the U.S., while $147.7 million, or 38%, came from international markets.

The company's membership grew 38% year-to-year, to over 259 million members.

LinkedIn is expecting revenue in the range of $415 million and $420 million for the fourth quarter, while adjusted EBITDA is expected to range between $98 million and $100 million. 

For the full year, the company revised its estimates upward to $1.5 billion in revenue, and adjusted EBITDA of $364 million.

Both estimate fell short of consensus, however. For Q4, the street is expecting revenue of $438.08 million, and revenye of $1.51 billion for the full year.

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