LinkedIn Guidance Not as Strong as Earnings

LinkedIn Corp. (NYSE: LNKD) has reported its first-quarter earnings and revenues, beating on both estimates. The professional network saw real volatility after its report, and a beat on earnings may be trumped by caution in sales guidance.

Earnings came in at $0.38 per share on an adjusted basis and revenue was up 46% to $473.2 million. Thomson Reuters has the consensus estimates for the first quarter of $0.34 in earnings per share and $466.57 million in revenues.

Revenue from Talent Solutions products rose 50% to $275.9 million, representing 58% of total revenue (versus 57% a year ago). Revenue from Marketing Solutions products rose 36% to $101.8 million, representing 22% of total revenue (versus 23% a year ago). Revenue from Premium Subscriptions products rose 46% to $95.5 million, representing 20% of total revenue (same as a year ago).

Revenue from the U.S. was $284.9 million, 60% of total revenue; revenue from international markets totaled $188.3 million, 40% of total revenue. Field sales channel was 58% or $275.3 million; and revenue from the online, direct sales channel was 42% of total revenue or $197.9 million.

LinkedIn’s revenue guidance for the second quarter is $500 million to $505 million, slightly under the $505.1 million in revenue expected by Thomson Reuters. Revenue for 2014 was put in a range of $2.06 billion to $2.08 billion, versus the consensus of $2.11 billion.

LinkedIn shares closed up 5% at $161.22 on the day, and shares were whipping around in the after-hours session. The after-hours price at 4:29 p.m. EST was down 3.9% at $155.00.

The big question remains whether investors should be paying 100 times expected 2014 earnings for this growth engine, particularly if its sales are going to be in-line with or slightly under expectations.

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