Today: LinkedIn continues to grow its revenues and pends $120 million on Bright, but stock dives as forecast for 2014 comes in less than expected. Also: Twitter tumbles hard after post-IPO earnings report.
The Lead: LinkedIn gets Bright as revenues rise, but investors send stock down
LinkedIn showed off continuing revenue growth in its fourth-quarter earnings report Thursday and announced its biggest acquisition yet, but investors punished the Mountain View professional-networking service in after-hours trading after the company's forecast for 2014 did not live up to expectations.
LinkedIn announced fourth-quarter profits of $3.8 million, or 30 cents a share, on revenues of $447.2 million, representing a profit decline of 66.9 percent from the previous year but revenue growth of 47 percent. After subtracting one-time charges such as stock-based compensation, the company's net income increased year-over-year, from $40.2 million to $48.2 million.
"Solid fourth quarter performance capped another successful year where improvements in scale and relevance across our platform led to strong member engagement," CEO Jeff Weiner said in Thursday's announcement.
In addition, LinkedIn announced its biggest acquisition to date, agreeing to purchase Bright for a total commitment of $120 million, the majority of which will be paid with a private placement of stock. The 3-year-old San Francisco startup uses big-data tactics to match job-seekers and prospective employers, which will be helpful as LinkedIn continues to build out its job listings.
"As we add more job listings over the next several years, Bright's powerful matching technology will be integral to ensuring that the prospects we suggest to employers and opportunities we surface for prospects are increasingly relevant," LinkedIn executive Parker Barrile wrote in a blog post on the acquisition.
LinkedIn investors weren't jumping for joy after the news, however, as shares dipped lower than $200 at times in after-hours trading following a regular session that saw the company's shares add 4.2 percent to $223.45. Analysts pointed to the company's 2014 forecast, which projected full-year revenues of $2.02 billion to $2.05 billion, lower than the average forecast of $2.16 billion.
"LinkedIn is continuing to grow, but that growth is slowing because of a scaling up of the business," ITG Investment Research analyst Steve Weinstein told Bloomberg News. "As you get bigger, it gets harder and harder to find a lever that can be material to growing your business."
In other earnings news, San Francisco-based OpenTable followed a similar track, announcing an acquisition along with earnings, yet experiencing a big after-hours stock decline. The online restaurant reservations company agreed to acquire Ness, a Los Altos-based app maker that focuses on personalized restaurant recommendations, for $17.2 million, a total that drops to $11.3 million when factoring in the cash Ness has in its coffers. OpenTable also said that it racked up profits of $10.3 million, or $0.43 per share, on revenues of $52.3 million, representing year-over-year revenue growth of 22 percent. Shares declined to less than $70 in late trading after gaining 3 percent to $75.41 in the regular session as, like LinkedIn, analysts expressed disappointment with the company's 2014 forecast.
San Jose-based Ubiquiti, which has been experiencing a comeback of sorts after a big stock decline, continued that path after announcing year-over-year increases of 135 percent for profit and 85 percent for revenues. The networking company reported profits of $41.8 million, or 47 cents a share, on revenues of $138.4 million, and shares jumped to more than $44 after closing with a 5 percent increase at $40.94.
Fellow San Jose networking company NetGear also experienced late trading gains, after announcing profits of $11.43 million, or 30 cents a share, on revenues of $356.62 million; shares gained to around $32 after closing with a 0.8 percent advance at $31.21.
SV150 market report: Wall Street rebounds, but Twitter tanks
Wall Street's Jekyll-and-Hyde week continued Thursday, as indexes had their best day of the year while investors anxiously await Friday's jobs report for more information about he direction of the U.S. economy. Silicon Valley stocks lagged the overall market, though, as Wednesday's round of earnings report caused uneven trading for the companies involved.
Wednesday's biggest earnings report, Twitter's first as a public company, led to Thursday's biggest tumble, as the San Francisco social-networking company suffered its worst day yet on Wall Street. Twitter stock dove 24.2 percent to $50.03 after the company's earnings showed a continuing decline in the growth rate for the service's users, concerning investors and analysts who know Twitter needs more users while seeking advertisers. Twitter also released a transparency report on the number of law-enforcement requests it has received, similar to the releases from other Silicon Valley companies this week following a compromise with the government on the standards for such releases. Twitter was much more vocal in its unhappiness about the format for disclosing the data, however, with executive Jeremy Kessel writing in a blog post that the company is "considering legal options we may have to seek to defend our First Amendment rights."
While Twitter suffered, Wednesday's other social company to announce earnings reaped rewards. Yelp jumped 18.9 percent to $89.46 after releasing its fourth-quarter results, which included a rosy 2014 forecast that cheered investors. Oakland-based Pandora headed the other way, dropping 10.1 percent to $32.23 after disappointing with its projections for this year, when "another big investment in building out the sales force will pressure the bottom line" for the streaming-radio service, Dougherty analyst Steve Frankel said Thursday.
Wall Street's fascination with initial public offerings from biotechnology companies continued Thursday, as Newark's Revance Therapeutics -- which is working on new variations of Botox -- raked in $96 million in an IPO, then saw its shares boom 67.8 percent higher in its first day of trading to close at $26.85. Google moved 1.5 percent higher to $1,159.96 after introducing a new videoconferencing offering that could challenge dominant positions held by San Jose companies Cisco Systems and Polycom; Cisco gained 2.3 percent to $22.49 on the day while Polycom gained 3.2 percent to $12.05. Tesla gained 2.3 percent to $178.38 after being named in a lawsuit after a Model S driver struck a bicyclist in Santa Cruz, and Apple gained 0.6 percent to $512.51 after jettisoning a Bitcoin-related app.
Up: Yelp, Palo Alto Networks, LinkedIn, AMD, Workday, Cisco, Tesla, Oracle, SanDisk, Yahoo, Intel, Hewlett-Packard, eBay, VMware, Google, Nvidia, Electronic Arts
Down: Twitter, Pandora, Gilead, SolarCity, SunPower, Symantec, Facebook
The SV150 index of Silicon Valley's largest tech companies: Up 12.8, or 0.87 percent, to 1,489.67
The tech-heavy Nasdaq composite index: Up 45.57, or 1.14 percent, to 4,057.12
The blue chip Dow Jones industrial average: Up 188.3, or 1.22 percent, to 15,628.53
And the widely watched Standard & Poor's 500 index: Up 21.79, or 1.24 percent, to 1,773.43
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/jowens510.