LinkedIn Earnings Are Strong, But Weak Guidance Sinks the Stock

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The future does not look so bright for LinkedIn (NYSE:LNKD). The professional social network closed Thursday’s regular session up 4.39 percent at $223.76 per share but fell as much as 11 percent in post-market trading after reporting fourth-quarter and full-year earnings that didn’t quite give investors what they wanted.

The earnings picture was actually all right: fourth-quarter revenue increased 47 percent on the year to $447.2 million, beating the mean analyst estimate of $437.84 million; adjusted earnings increased 11.4 percent on the year to 39 cents per diluted share, beating the mean analyst estimate of 38 cents. Adjusted EBITDA came in at $111.4 million, up 41.7 percent on the year — however, as a share of revenue, EBITDA fell from 26 percent to 25 percent.

For the year, revenue increased 57.2 percent to $1.53 billion, just barely beating out the mean analyst estimate of $1.52 billion. Adjusted earnings increased 80.9 percent to $1.61 per diluted share, in line with the mean analyst estimate. Full-year adjusted EBITDA increased 68.6 percent to $376.3 million.

It’s the guidance that triggered the post-market selling. LinkedIn guided first-quarter revenue in a range between $455 million and $460 million, the high end of which is below the current mean analyst estimate of $470.27 million. Adjusted EBITDA is expected in a range between $106 million and $108 million, about 23 percent of revenue. For the year, revenue is expected in a range between $2.02 billion and $2.05 billion, below the current mean analyst estimate of $2.16 billion. Full-year adjusted EBITDA is expected to be approximately $490 million,  or about 24.4 percent of revenue.

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