LinkedIn (LNKD) Shares Soar as Learning and Development Revenue Doubles

Shares of LinkedIn Corp. were trading up +30.04 or +13.84 percent to $247.07 per share in Friday’s premarket after the company announced better than expected third quarter earnings yesterday after the market close. LinkedIn stock closed at $217.00 per share, up +3.79 or +1.78 percent in Thursday’s regular trading session.

Mountain View, California based LinkedIn Corp. is a social network website that offers services to people in professional capacities.
Founded in 2003, LinkedIn has grown exponentially, having gained a total of over 400 million acquired users in 200 countries around the world and is the largest professional network on the Internet. In addition, the company has over 30,000 corporate customers. LinkedIn’s average net yearly profits have grown an average of +139 percent every year since its founding and the firm is considered one of the most successful startups of all time.

For the company’s third quarter, LinkedIn announced it had earnings per share of $0.78 on revenue of $779.6 million. The analyst consensus was for the company to report earnings of $0.46 per share on revenue of $755 million.

One of the main drivers for LinkedIn’s positive earnings was the Learning and Development unit, which was formerly The unit added an additional $41 million to the company's third quarter earnings in its first full quarter after being acquired by LinkedIn in early April for $1.5 billion. The Talent Solutions unit also saw significant improvement, with revenue up +46 percent year on year to $506 million, while the Hiring unit grew +34 percent in the quarter to $461 million.

Ad revenue from the Marketing Solutions unit increased to $140 million, up +28 percent year on year, which was lower than the second quarter’s +32 percent rise. Sales Navigator premium memberships increased +21 percent to $138 million after an increase of +22 percent in the second quarter. The strong U.S. Dollar accounted for a six percent impact on revenue growth.

In the conference call after the earnings release, LinkedIn Chief Executive Officer and Director, Jeffrey Weiner said that, “Third quarter cumulative members grew +20 percent to 396 million, and last week reached the 400 million member milestone. Unique visiting members grew 11percent to an average of 100 million per month, and member page views grew 33 percent. This has yielded 20 percent year-over-year growth in page views per unique visiting member, continuing a pattern of accelerated growth throughout 2015. This is in part a result of placing more emphasis on quality engagement for our members and less on transactional engagement generated by emails. Mobile continues to grow at double the rate of overall member activity, and now represents 55 percent of all traffic to LinkedIn.”

Unique visitors increased +11 percent to an average of 100 million a month, while member page views rose +33 percent to 38 billion. The Chinese market for LinkedIn has gained considerably, with more than 13 million new members, more than triple the amount of members it had in early 2014. The company’s mobile unit now accounts for 55 percent of the company’s total traffic.

Guidance for LinkedIn’s fourth quarter is for earnings per share of $0.74 on revenue of $845 million to $850 million. Analyst forecast the company would earn $0.67 on revenue of $846 million in the fourth quarter.

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Published on Oct 30, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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