Professional network social media outlet LinkedIn (LNKD) reported earnings and sales after the bell Tuesday. Revenues were up higher than expected: $393 million in the September quarter, as opposed to the $384 million consensus.
But after-hours trading is down at this time. Following a 1.7% gain in regular trading (on a day when the NASDAQ set a new all-time high), traders in the late session sold off more than 7% of LNKD stock on the news at one point. The stock has since gained some of that back on heavy volume in the after-market.
Guidance for fiscal 2013 is $1.5 billion — the same as Zacks' projections — but guidance for the 4th quarter is lower than expected: $415-420 million, down from the Zacks Consensus of $437 million for next quarter. With a young company like LinkedIn, a couple cents off the EPS here or there might be forgiven, but when it comes to lowered growth trajectories, not so much.
In fact, though growth rates for the company's Q3 were up 56% year over year — obviously still quite good — that's down from 59% the previous quarter and triple-digit growth rates before that. LinkedIn has become known in a general sense as "Facebook (FB) for Business" (though that's admittedly an oversimplification), and building up its Talent Solutions, Marketing Solutions and Premium Subscription businesses quarter after quarter is crucial.
That goes especially for the fact that LinkedIn is currently trading at nosebleed multiples, and the stock is up 115% year to date. Just like Facebook, of course, stocks like LinkedIn are plays on the future of social media as an entity, including the delicate balance between a satisfying user experience and the ability to sufficiently monetize its services. We see trial balloons all over the place for new ways to get advertisers onto these popular sites, and LinkedIn is one of the most desirable destinations: the company now has 259 million members, up 38% year over year.
The upcoming conference call will likely be spent assuaging investors' fears about dwindling growth and lowered revenue guidance. Perhaps the company is just being especially cautious, and may allow for sales to begin accelerating domestically and overseas as LinkedIn continues to target taking share from companies like Monster Worldwide (MWW).
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