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LinkedIn Q4 revenue jumps 44%; results beat Street view

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LinkedIn (NYSE:LNKD) surged after the corporate networking site reported a higher-than-expected 44 percent climb in fourth-quarter revenue as it extended its reach by continuing the shift to mobile amid an international expansion.

Shares rallied 13 percent to $270.58 at 10:22 a.m. in New York, extending gains in the past year to 21 percent.

Revenue rose to $643.4 million in the October-to-December quarter from $447.2 million in the year-earlier period, the Mountain View, California-based company said in a statement late yesterday.

That bested analysts' projections by about $26 million, according to Capital IQ estimates.

Net income fell to $3 million, or $0.02 per share, during the final three months of last year. That represented a 21 percent decrease from $3.8 million, or $0.03 per share, in the same 2013 period.

Excluding items, LinkedIn said it would have earned $0.61 per share. That figure exceeded the average estimate of $0.53 per share among analysts surveyed by Capital IQ.

LinkedIn ended December with 347 million users who had posted their work histories on the service, a gain of 15 million from September. Nearly 70 percent of its members were from outside the U.S., company officials said.

A monthly average of 93 million people visited LinkedIn during the fourth quarter, up from 90 million in the third quarter.

This month the company launched a localized version in simplified Chinese and traditional Chinese that has nearly doubled its Chinese membership to more than 8 million

The company--which went public in 2011 with an initial public offering of $45 a share--makes most of its money from job recruiting, premium subscriptions and advertising.

Talent solutions, which accounted for 57 percent of total revenue, rose 41 percent from the year-earlier period, while revenue from marketing solutions rose 56 percent, led by “sponsored updates,” its main source of advertising, which doubled from the previous quarter and more than tripled from the year-earlier period. Premium subscriptions rose 38 percent to $121 million.

The U.S. accounted for 60 percent, or $388 million, of total revenue with international markets accounting for 40 percent of total revenue. A year earlier, international revenue represented 39 percent of total revenue, to 61 percent coming from domestic markets.

Moving forward, LinkedIn said it expects to make $0.53 per share on revenue of $618 million to $622 million in the current quarter and $2.95 a share on revenue of $2.93 billion to $2.95 billion for the year. Analysts expect earnings of $0.55 per share on $645.7 million in revenue for the quarter and $2.73 a share on $2.94 billion in revenue for the year.

"The fourth quarter underscored a strong 2014 for LinkedIn, as we demonstrated growing organic engagement and solid performance across our three, diverse product lines," chief executive officer Steve Sordello said in the statement. "Entering 2015, we plan to continue investing in our long-term roadmap to further pursue our vision to build the world's first economic graph."

LinkedIn has recently started to do more to help companies generate more sales of their products and services. The newest product, called "Sales Navigator," is attracting more subscribers than LinkedIn anticipated so far, though management didn't reveal any specific numbers about its growth. LinkedIn believes Navigator can become an indispensable tool in an estimated $10 billion market for sales tips and introductions.

 

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