Two more innovative companies have reported earnings results after the bell Thursday, daily-deals provider Groupon (GRPN) and job-oriented social media firm LinkedIn (LNKD) both beat revenue estimates fot their September quarters, along with beating earnings estimates. However, both companies left after-market traders wanting immediately after their reports on less-than-stellar Q4 guidance.
Groupon posted a loss of 1 cent per share, beating the Zacks consensus estimate of -4 cents, and revenues spiked nicely to $757 million compared to the $742 expected. LinkedIn also posted earings of 10 cents per share (adjusted, including stock-based compensation costs) on $568 million in sales, topping the -5 cents and $562 million we were looking for. Both companies cited admirable year-over-year growth in the mid-double-digits, and attributed much of their positive outlook to its recent acquisitions: Ticket Monster for Groupon (which sent its Rest of the World segment through the roof with triple-digit growth from a year ago) and Bizo (which should play a big role in LinkedIn's B2B business in the coming quarters).
But we saw Groupon shares dip upon the first read-through of its earnings numbers, and that may have to do with its guidance for the December quarter a tad lower than analysts may have been expecting: the Zacks consensus is looking for $921 million in sales for the company's Q4, and guidance was for a range of $875 – 925 million. Groupon has pushed back into positive territory of late in the after-market; we shall see at tomorrow's opening bell if the company can keep some stock price momentum following regular Thursday's 3.45% gains.
Groupon could really use the boost — before the earnings announcement, the company had been trading down nearly 50% year to date. But with growth billings up 39% and total units up 92% year over year, perhaps we're finally seeing Groupon push toward profitability.
LinkedIn's Q4 guidance was far worse than investors were looking for: a range of $600 – 605 million for the December quarter is well short of the $621 million in the Zacks consensus. Perhaps the company is a bit unsure when meaningful sales will be generated by its Sales Navigator stand-alone solution for sales reps and clients, as well as the previously mentioned Bizo.
Surprisingly, though, LinkedIn isn't paying the price for weaker growth projections the way Twitter (TWTR) did earlier this week. Its shares are up roughly 2.5% in late trading, following modest gains early Thursday and 3.5% gains over the past five days.
Both Groupon and LinkedIn are down since this time a year ago, but clearly there is much money riding on these 21st century firms figuring out how to best monetize their various services. Groupon is currently a Zacks Rank #3 and LinkedIn a Zacks Rank #2 (Buy).
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