What to look for in LinkedIn’s earnings

SAN FRANCISCO (MarketWatch) — Online professional-services networking company LinkedIn Corp. is scheduled to deliver its third-quarter results after the close of trading Thursday. Here are some things to look for in the company’s report:
Earnings: Analysts surveyed by FactSet are expecting LinkedIn LNKD, -1.04%  to report per-share earnings of 47 cents, up from 39 cents in the year-earlier period.
Revenue: LinkedIn LNKD, -1.04%   is expected to report quarterly sales of $558 million, up 42% from $393 million in the year-ago quarter.

Stock performance: LinkedIn stock has declined by about 8% in the year so far, while the S&P 500 SPX, -0.15%   has gained 6.2%. The stock is up 12.5% in the last three months, but is 21% below its all-time closing high of $253.22, reached on Sept. 6, 2013.
Other matters: Analysts will keep their eyes on the overall growth of LinkedIn’s customer and member numbers. John Blackledge of Cowen & Co is expecting the company to report that it ended its third quarter with 329.9 million members, a 27% increase over last-year’s comparable period.
LinkedIn’s revenue comes from three main business units: talent solutions, in which companies pay for a page of their own on LinkedIn’s site and a receive access to LinkedIn’s resume and user databases; marketing solutions, or targeted ads placed by advertisers; and premium subscriptions, in which LinkedIn members pay for greater access to information beyond basic job ads.
The majority of LinkedIn’s revenue comes from its talent solutions offerings, and Youssef Squali of Cantor Fitzgerald said the business unit “should continue to see robust growth, benefiting from market share gains from traditional offline and online players.” Squali estimates LinkedIn’s revenue from that business will reach $339 million in the quarter, up more than 42% from the same period a year ago.

Blackledge, of Cowen & Co., will be looking for an update on the success of the company’s sales navigator tool. LinkedIn re-launched the tool in August as a stand-alone product for salespeople to track leads, connections and other information gathered for business purposes via LinkedIn.
“We are curious to hear about initial customer traction [and] growth of the sales navigator sales force and the outlook into [the] year-end,” Blackledge said.