LinkedIn Corp (LNKD) bucked the general trend on Wall Street on Thursday, as LNKD stock jumped 3.5% on a day that the Dow Jones Industrial Average lost more than 200 points. Clearly, traders were wagering on an impressive earnings report from the professional social network.
Well, they certainly got it. LNKD stock initially roared 15% higher in after-hours trading after walloping both earnings and revenue expectations, while simultaneously guiding higher for Q2 and full-year 2016. At the time of publication, those gains were a more muted 5%.
Still, there’s only one way to characterize Thursday’s results: absolutely stellar.
LNKD Stock: 100% Redeemed?
This report stands in polar opposition to the last quarterly report we got from LinkedIn. When the company last announced Q4 2015 results in early February, LNKD stock promptly responded by tumbling more than 40% in a single day. Not this time.
Interestingly enough, the February fall was almost entirely due to what the Street interpreted as weak guidance related to Q1 — you know, the quarter that’s sending LNKD stock surging in after-hours action today.
Now, the numbers.
Analysts were expecting LinkedIn to post revenue of $828.47 million, up 29.9% year-over-year. Nope, revenues clocked in at $861 million, crushing those estimates. Adjusted earnings per share were expected to come in at 60 cents, up a modest 5% annually. Instead, EPS surged 30%, totaling 74 cents.
Driving the growth was success in mobile, which CEO Jeff Weiner credited for increasing engagement. There’s no doubt that LNKD stock traders are happily comparing this in their minds to recent Facebook Inc (FB) earnings, which also blew the top off expectations and benefited from strong mobile adoption.
Did LinkedIn guide conservatively last quarter just so it could beat on Q1 earnings? Who knows? What we do know is that LNKD didn’t repeat the mistake it made in February: Management raised Q2 revenue guidance to between $885 million and $890 million, on adjusted EPS between 74 cents and 77 cents. Analysts were looking for EPS of 71 cents on revenue of $886.05 million.
The biggest reason LNKD is soaring may indeed be because of its rosy longer-term guidance, which extended past Q2. Full-year 2016 guidance topped Wall Street consensus estimates, too; The company expects EPS between $3.30 and $3.40 on revenue between $3.65 billion and $3.7 billion. Wall Street was looking for EPS of $3.19 on revenue of $3.67 billion.
On the whole, technology stocks haven’t been doing so hot this earnings season, which makes LinkedIn (and Facebook) a standout here.
Apple Inc. (AAPL), Alphabet Inc (GOOG, GOOGL), Twitter Inc (TWTR), Microsoft Corporation (MSFT) and International Business Machines (IBM) each separately reported underwhelming quarterly results to little fanfare.
LinkedIn, for its part, deserves a pat on the back — and a dramatically higher share price — for its performance in Q1 and guidance for the remainder of the year.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
