Today: LinkedIn shares surge after-hours as it joins Facebook and Twitter in posting strong quarterly growth. Also, stock markets take a tumble, and Tesla Motors ramps up production.
The Lead: LinkedIn posts membership, revenue gains; shares surge after-hours
LinkedIn rode gains in China to strong growth in members and revenues in the second quarter, and the professional-networking company followed its social-media brethren in enjoying a huge post-earnings stock boost.
The Mountain View website reported a net loss of $1 million, or a penny a share, on revenues of $534 million, representing sales gains of 47 percent from the previous quarter. After adjusting for stock-based compensation and other expenses, LinkedIn claimed a profit of $63 million, or 51 cents a share, blowing away expectations of 39 cents a share on sales of $511 million.
LinkedIn shares jumped more than 8 percent in late trading, touching prices the company's stock had not seen since March. The post-earnings bounce mirrored the performance of Silicon Valley other two large social-media companies, Facebook and Twitter, both of which surged higher after their earnings reports earlier this month.
LinkedIn joined Facebook in producing revenue growth and a mobile focus -- 45 percent of LinkedIn traffic was from mobile devices -- that investors like to see, while also exhibiting the ability to grow its user base, which was a big boost for Twitter earlier this week.
LinkedIn accomplished those goals by walking a different path, however. While Facebook and Twitter make their money by selling advertisements, LinkedIn makes most of its revenues by selling advanced access to its wealth of resumes and worker information to human resources professionals, recruiters and other parties, more similar to an enterprise software company than other social networks. The company is obviously looking to strengthen that revenue stream, announcing the $175 million acquisition of marketing-software firm Bizo earlier this month and launching its Sales Navigator offering as a stand-alone service Thursday.
LinkedIn executives said in Thursday's conference call that Bizo will be the hub of a renewed focus on business-to-business transactions on the site, giving LinkedIn the ability to attract a different type of advertising stream than the consumer-facing approach of Facebook and Twitter.
"They're still in the early innings of capturing a longer-term opportunity. A suite of products improving the user experience and improving analytics will drive long-term value," Telsey Advisory Group analyst James Cakmak told Bloomberg News.
The biggest difference for LinkedIn's user base, which grew 32 percent to 313 million, was its entry into a market that has been off-limits to most consumer-facing Silicon Valley companies so far: China.
"After launching our Simplified Chinese site in February, China has now become our fastest growing major market for new members over the past several months," CEO Jeff Weiner said in Thursday's conference call to discuss the company's results, which revealed that user growth rates that were in the single digits earlier this year sprang to as much as 70 percent after LinkedIn made its move for the Chinese market earlier this year.
In addition to exceeding forecasts in the second quarter, LinkedIn predicted stronger revenues in the current quarter and increased full-year projections, which cheered analysts and investors. After closing down 3.6 percent at $180.64, shares jumped to more than $195 at times in late trading.
SV150 market report: Markets tumble, Tesla bumps up production
LinkedIn's decline in regular trading Thursday was pretty standard, as Wall Street suffered a massive decline that wiped out the rest of the month's gains. Other Silicon Valley earnings reports after the bell Thursday did not do much to improve the outlook for Friday, as Tesla's Gigafactory plans didn't move the needle and the region's newest superstar public company plummeted after its first post-IPO earnings report.
Tesla revealed a loss of $60.7 million, or 50 cents a share, on $769 million in sales during the second quarter. while delivering 7,579 all-electric Model S sedans. The Palo Alto company increased its expectations for production this year to more than 35,000 cars, though, thanks to a new production line being installed at its Fremont factory, while revealing that it has broken ground on a site near Reno, Nevada, that could house its Gigafactory, a planned massive battery factory. Tesla's push for partnerships in its Gigafactory effort finally paid off Thursday, as Panasonic officially agreed to work with the electric car manufacturer on the lithium-ion battery effort. Tesla shares closed with a 2.5 percent descent at $223.30, and hung near that level in after-hours trading following the release of the results.
GoPro was not as fortunate: In its first earnings release after a blockbuster IPO, the San Mateo action-camera company plummeted 10 percent in late trading after displaying widening losses when compared with last year. San Jose solar manufacturer SunPower also fell following its earnings report, which showed a decline from the previous quarter's stellar results, with shares declining about 5 percent after closing with a 4 percent decline at $36.73. Yelp dropped 11.2 percent on the day after announcing its first profitable quarter, as analysts exhibited concern about the number of paying advertisers. Facebook declined 1.7 percent to $72.65 after CEO Mark Zuckerberg launched one of his biggest Internet.org efforts yet, limited free mobile access in Zambia. Apple dropped 2.6 percent to $95.60 after confirming layoffs at Beats, the headphones and music-service company that it bought for $3.2 billion earlier this year.
Up: Shutterfly, Lam Research, AMD, InvenSense
Down: Yelp, SunPower, SolarCity, Adobe, Salesforce, LinkedIn, Pandora, Nvidia, Facebook, Netflix, Google, Apple
The SV150 index of Silicon Valley's largest tech companies: Down 34.29, or 2.18 percent, to 1,540.71
The tech-heavy Nasdaq composite index: Down 93.13, or 2.09 percent, to 4,369.77
The blue chip Dow Jones industrial average: Down 317.06, or 1.88 percent, to 16,563.3
And the widely watched Standard & Poor's 500 index: Down 39.4, or 2 percent, to 1,930.67