labor market

LinkedIn lnkd stock china
Sponsored By:

LinkedIn Earnings Prove LNKD Stock Is No Fad

LinkedIn (LNKD) reported strong earnings after the bell Thursday, and shares are rallying again this morning as a result.

That’s because LinkedIn earnings are further validation that this stock is a legitimate and growing business, not a social media fad.

Details show revenue of $363.7 million and adjusted profits of 38 cents per share. Analysts expected LinkedIn earnings to come to 31 cents per share on revenue of $354 million, so that’s a beat on both fronts. Year-over-year, Revenue jumped about 60% from $228 million, and earnings almost doubled from 16 cents in Q2 2012.

On the heels of a nice beat from Facebook (FB) after earnings, you might think this is just strength in social media broadly. But LinkedIn is a different beast, relying on more than display advertising.

For instance: In the latest quarter, LinkedIn earnings saw a surge in recruitment products revenue that helped power results. The subscription-based services for both businesses and job-seekers is a great way to add additional revenue.

True, advertising on mobile isn’t as lucrative, and that’s a risk as more LinkedIn traffic moves away from the desktop. There’s also a risk of slowing growth, since LinkedIn’s guidance for the third quarter was below the consensus range.

But LNKD has a real media CEO in Jeff Weiner, who joined LinkedIn in 2008 after serving as a vice president at Yahoo (YHOO) — with experience at the company that runs the once-popular HotJobs employment website. That should help LinkedIn grow responsibly — and since there’s a business brain instead of a programmer with a mind for code but not for profits here, investors can have confidence.

And while LNKD’s Q3 guidance fell short, the company did revise its full-year 2013 expectations up from $1.455 billion to $1.475 billion.

Going forward, it remains clear that people are relying on connections to get jobs in the new economy — and LinkedIn is in the right place at the right time to lead this shift in how people find work.

LinkedIn earnings for the second quarter validate this.

Related Reading

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at or follow him on Twitter via @JeffReevesIP.  As of this writing, he did not own a position in any of the stocks named here.

Get The Slant delivered to your inbox every day!