As the earnings season wanes, quarterly financial reports from the tech sector continue to be mixed, though shares in IT companies are still up for the year.
Professional social networking site LinkedIn wowed market watchers with a strong earnings report after the market closed Thursday, causing company shares to spike by US$8.39 to $117.90 in Friday morning trading. Revenue for its first quarter skyrocketed year-over-year by 101 per cent to US$188.5 million, while net income more than doubled to US$5 million.
The company has had strong growth internationally, reporting that revenue from international markets represented 36 per cent of total sales in the first quarter.
Earlier in the week, online consumer-review site Yelp announced that revenue for the first quarter increased 66 per cent year-over-year to US$24.7 million. It was Yelp’s first quarter as a public company. The company’s net loss increased year-over-year to US$9.8 million, from US$2.8 million, but increasing costs have been expected as the company ramps up research, development and marketing expenses.
In the chip sector, Broadcom on Tuesday reported first-quarter revenue of US$1.83 billion, up 0.4 percent from a year earlier. Net income plunged year-over-year to US$88 million from US$254 million. However, market watchers were expecting a tough quarter for the chip industry, and Broadcom ended up exceeding analyst expectations.
With its focus on semiconductors for mobile devices, Broadcom is in a good position, according to Canaccord Genuity technology analyst Bobby Burleson, who reiterated his “buy” rating on the company.
“In our view, investors should own Broadcom ahead of a strengthening ramp for Mobile & Wireless in the H2 as headwinds from 2G ease and customers introduce new products (iPhone5, additional entry-level smartphones using platform solution),” Burleson wrote in a research note.