Ahead of the Bell: LinkedIn to report 1Q results

Associated Press

MOUNTAIN VIEW, Calif. (AP) — LinkedIn Corp.'s lofty stock price will be riding on the online professional networking service's first-quarter earnings, due out after the stock market closes Thursday.

The results will give investors their latest insights into the moneymaking potential of companies that specialize in uniting people over there common interests.

Analysts polled by FactSet expect LinkedIn to report adjusted earnings of 9 cents per share, excluding employee stock compensation expenses. LinkedIn didn't report adjusted earnings for that period, when it broke even under the accounting principles mandated by securities regulators.

LinkedIn's quarterly revenue is expected to nearly double to $179 million. It is reporting on its finances as Facebook Inc., owner of the Internet's largest social network, prepares for the biggest initial public offering of stock in Silicon Valley history. Facebook hopes to raise at least $5 billion in its IPO, which could be come as early as May 17.

Unlike Facebook's free-wheeling network, LinkedIn's revolves around advancing the careers of people who post their resumes on the website.

LinkedIn started the year with about 145 million members. The company, which is based in Mountain View, Calif., has been adding about 5 million more members per month — and it probably needs to sustain that pace to support its stock price.

The shares closed Wednesday at $106.40, almost 170 times analysts' estimates for LinkedIn's adjusted earnings for all of this year. After nearly a year on the market, the shares also remain well above their IPO price of $45. That's an accomplishment that has eluded other highly touted, newly public Internet companies, including Web game maker Zynga Inc. and online coupon distributor Groupon Inc.

LinkedIn's emergence as a digital rolodex for employers and job seekers alike has enabled to charge fees for analytical tools and expanded access to people who have posted profiles on the websites.

Those fees generate most of LinkedIn's revenue. The company makes the rest of its money from advertising.