Today: LinkedIn proves its title as investors' favorite social network is deserved, reporting record-breaking revenues. Also: Apple (AAPL) plays nice in battle with investor, SunPower (SPWRA) earnings disappoint.
LinkedIn yet again blows forecasts away with earnings report
LinkedIn was the first of Silicon Valley's social networks to reach the public markets, and it has avoided the volatile drops and spikes in its stock price that other companies in the sector have suffered. The trust investors have in the company was borne out again Thursday, as the Mountain View professional-networking company obliterated forecasts for its earnings, as the company has done every quarter since going public.
LinkedIn reported revenues of $303.6 million, 81 percent higher than the same quarter in 2012 and the first time it has pulled in more than $300 million in a three-month period. The company reported $40.2 million in profit, excluding certain items, or 35 cents a share. Analysts on average expected the company to report profits of 19 cents a share on revenues of $280 million, according to Thomson Reuters.
"The company keeps raising the bar and then beating it solidly," Needham analyst Kerry Rice told MarketWatch, adding that LinkedIn provided "great numbers" and "great guidance."
Even the company's projections for the current quarter were stronger than expected, as LinkedIn forecast first-quarter revenues between $305 million and $310 million, while analysts expected $301 million.
For the calendar year, LinkedIn barely missed topping $1 billion in revenues at $972.3 million, 86 percent higher than the 2011 total of $522.2 million. Excluding certain items, the company brought in 89 cents a share on the year, more than doubling its 2011 profits of 35 cents a share.
"2012 was a transformative year for LinkedIn," CEO Jeff Weiner said in Thursday's news release, later adding, "The products we delivered throughout the year drove member engagement and financial results to record levels in the fourth quarter."
LinkedIn shares shot higher after the news arrived, gaining more than 10 percent to $137 a share after closing with a 1.3 percent drop at $124.09. LinkedIn's stock price has never dipped below its IPO price of $45 and was selling for more than three times that amount Thursday afternoon, while Facebook and Zyng have traded lower than their IPO price for most of their lives as public companies.
LinkedIn's uninterrupted growth and diversified revenue stream seem to be the main reasons it has been a Wall Street darling while other social-media companies face withering criticism and volatile stock prices. This chart from Business Insider shows the staggering growth rate for all three of the companies' revenue generators -- recruiting tools, ads and listings, and premium subscriptions.
While other social networks have larger membership bases, with LinkedIn recently surpassing 200 million, and even higher revenues -- Facebook's revenue in 2012 was nearly 5 times what LinkedIn brought in -- the company has proven every quarter it has reported profits that it knows how to run its business to continually produce growth.
"Investors clearly like LinkedIn's mix of advertising and fee revenue, both of which are experiencing exceptional growth," Bloomberg Industries analyst Paul Sweeney said.
Apple investor pushes for cash, company says it is under consideration
What seemed to be a challenging day for Apple ended with a stock spike, as the Cupertino tech giant responded to a lawsuit from an activist investor by publicly saying that leadership is contemplating pushing some of its cash hoard out to stockholders.
David Einhorn, head of Apple investor Greenlight Capital, said Thursday that Apple needed to issue a preferred stock that would pay out a greater dividend in order to return some of the $137 billion it has in its coffers to investors who have stuck by the company through its recent Wall Street downturn. He also filed suit against the company to prevent it from passing a rule that would make it harder to issue preferred stock, which will be voted on at the company's annual meeting.
Surprisingly for the typically tight-lipped company, Apple released a statement on the issue just before the markets closed Thursday, saying that the company is looking at ways to get some of its profits to shareholders, and that the rule it seeks to pass would not preclude the type of move Einhorn wants.
"We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value," the statement concluded.
Apple stock spiked as soon as the statement was released -- trading at $456.47, lower than Wednesday's closing price, only 22 minutes before the end of the session, it jumped to a 3 percent gain in the closing moments of the regular session. Shares closed at $468.22, the highest closing price for Apple stock since its most recent earnings report last month.
Yahoo and Google gain after advertising deal, SunPower earnings disappoint
Apple's late rise helped two of the three major U.S. stock indexes, which struggled to gain momentum Thursday and ended with losses. Tech stocks had a decent day, however, as the SV150 index of Silicon Valley's largest technology companies gained 0.3 percent and the tech-heavy Nasdaq's loss of 0.1 percent made it the best performer among the three major indexes.
Yahoo (YHOO) gained 2.4 percent and closed higher than $20 a share a day after reaching a deal with Google (GOOG) to work together on advertising and receiving an upgrade from Pivotal Research Group; Google again hit an all-time intraday high and gained 0.5 percent to close at $773.95. Zynga continued to gain following its report of a surprising fourth-quarter profits, increasing 3.3 percent Thursday to close higher than $3 a share for the first time since September.
Yelp was not as fortunate as Zynga after releasing its earnings report Wednesday: The San Francisco company's shares fell 4.6 percent Thursday to close at $21.35. Tech giants Hewlett-Packard (HPQ) and Oracle (ORCL) both dropped 1.5 percent on the day.
In Silicon Valley's other major earnings report Thursday, San Jose solar manufacturer SunPower disappointed investors and analysts with more losses and a dour forecast for 2013, sending the stock down 5 percent in after-hours trading following a gain of 0.4 percent in the regular session.
Silicon Valley tech stocks
Up: Zynga, Apple, Yahoo, Jive, SolarCity, Gilead, Tesla, Google, SunPower, VMware
The tech-heavy Nasdaq composite index: Down 3.35, or 0.11 percent, to 3,165.13
The blue chip Dow Jones industrial average: Down 42.47, or 0.3 percent, to 13,944.05
And the widely watched Standard & Poor's 500 index: Down 2.73, or 0.18 percent, to 1,509.39
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.