LinkedIn (LNKD) Earnings: What to Expect

NEW YORK (TheStreet) -- LinkedIn (LNKD) is due to report first-quarter earnings after the bell Thursday, May 1. 

Analysts surveyed by Thomson Reuters anticipate an unadjusted net loss of 7 cents a share. Excluding items, estimates are for net income of $43.3 million, or 34 cents a share.

Revenue is expected to climb 43.7% year over year to $466.6 million from $324.7 million in the year-ago quarter.

During the social network's fourth quarter, management said it expects first-quarter revenue this quarter between $455 million and $460 million.

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TheStreet Ratings team rates LINKEDIN CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LINKEDIN CORP (LNKD) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, disappointing return on equity and premium valuation."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The share price of LINKEDIN CORP has not done very well: it is down 8.57% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 67.1% when compared to the same quarter one year ago, falling from $11.51 million to $3.78 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, LINKEDIN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LINKEDIN CORP is currently very high, coming in at 87.06%. Regardless of LNKD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LNKD's net profit margin of 0.84% is significantly lower than the industry average.
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