LinkedIn Corp. Earnings: Make That Four Consecutive Quarters of Crushing Estimates

By Tim

The LinkedIn team at the New York Stock Exchange. Credit: LinkedIn.

Shares of LinkedIn stock jumped nearly 7% in late trading after reporting better-than-expected fourth-quarter results. Here's a closer look at the final totals versus Wall Street's projections:

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LinkedIn Revenue YOY Growth EPS YOY Growth
Consensus estimate $617 million 37.9% $0.53 35.9%
Q4 actuals $643.4 million 43.9% $0.61 56.4%
DIFFERENCE $26.4 million 6% $0.08 20.5%

Sources: S&P Capital IQ and LinkedIn press release.

For the year, LinkedIn reported $2.22 billion in revenue and $2.02 in non-GAAP profit. Analysts tracked by S&P Capital IQ were calling for $2.19 billion and $1.94 a share, respectively.

"The fourth quarter capped another successful year for LinkedIn, which was marked by steady member growth and strong financial results," said Jeff Weiner, CEO of LinkedIn, in a press release. "We continued to make significant progress against a number of multi-year, strategic initiatives including mobile, jobs, content, and global expansion."

The results also mark the fourth-consecutive quarter in which LinkedIn has topped analysts' average profit target by at least $0.04 a share.

What went right:Marketing Solutions put up the best numbers among LinkedIn's three main areas of business, growing revenue 56% year over year as professionals began using the platform to publish their ideas. The site now hosts more than 1 million long-form posts, and adds 50,000 more every week.

What went wrong:Not much. If I had to pick a weak spot, it's on the cash flow statement where fourth-quarter cash from operations ($130.4 million) wasn't enough to cover capital expenditures ($241.6 million). That's nitpicking, though: LinkedIn has almost $2 billion more in cash and liquid securities than it does debt, and even the debt is convertible into stock. The company has more-than-enough capital to reinvest.

What's next:Looking ahead, LinkedIn projects $618 million to $622 million in first-quarter revenue, and $0.53 in adjusted profit. Analysts are targeting $646.5 million and $0.56 a share, respectively. They also see LinkedIn generating 40.54% average annual earnings growth during the next three-to-five years.

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Tim Beyersoccasionally beats his own estimates. He's also a member of theMotley Fool Rule Breakersstock-picking team and theMotley Fool SupernovaOdyssey I mission and owned shares of Apple at the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool.The Motley Fool recommends Apple and LinkedIn. The Motley Fool owns shares of Apple and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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