LinkedIn Corp Tanks After Swinging To A Loss, Posting Weak Outlook

LinkedIn Corp Tanks After Swinging To A Loss, Posting Weak Outlook

LinkedIn released its fourth quarter earnings report after closing bell tonight, posting 94 cents per share in adjusted earnings, compared to the consensus estimate of 78 cents per share, and revenue of 862 million, against the consensus of $857.6 million. Despite the top and bottom beats, shares of LinkedIn plummeted in after-hours trading, falling by as much as 25% to $144.47 per share as a result of a surprise GAAP loss and weak guidance.

In last year’s fourth quarter, the social network posted earnings of 61 cents per share and $643.4 million in revenue.

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LinkedIn swings to a loss

LinkedIn posted a GAAP loss of 6 cents per share, compared to last year’s earnings of 2 cents per share. Adjusted EBITDA was $249 million

The social network’s Talent Solutions revenue climbed 45% year over year to $535 million, with Hiring revenue contributing $487 million during the fourth quarter, representing a 32% increase. Management attributed the strong growth to strong new field sales accounts and continued online subscription strength. Learning and Development revenue amounted to $49 million.

Marketing Solutions revenue climbed 20% to $183 million with Sponsored Updates driving that growth as it surpassed 50% of the segment’s total revenue. Premium display ads took a hit from secular headwinds as they have in previous quarters.

Revenue from Premium Subscriptions climbed 19% to $144 million, with Sales Navigator continuing to be the faster growing section of the segment.

“In the quarter, cumulative members grew 19% to 414 million, unique visiting members grew 7% to an average of 100 million per month, and member page views grew 26%,” said LinkedIn CEO Jeff Weiner in a statement. “This yielded 17% year over year growth in page views per unique visiting member, continuing a pattern of strong engagement growth over the past several quarters. Mobile in particular grew 3x faster than overall member activity, and now represents 57% of all traffic to LinkedIn.”

LinkedIn provides weak guidance

Wall Street was also unimpressed with LinkedIn’s first quarter guide as management expects about $820 million, compared to the consensus of $866.9 million, and adjusted EBITDA to be about $190 million. They expect non-GAAP earnings of about 55 cents per share, against the consensus of 74 cents per share.

For the full year, LinkedIn projects between $3.6 billion and $3.65 billion in revenue, which again came up short of the consensus of $3.91 billion, and adjusted EBITDA of between $950 million and $975 million. The social network expects non-GAAP earnings of between $3.05 and $3.20 for the full year, compared to the consensus of $3.67 per share.

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