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Tags: linkedin | growth | job | services

LinkedIn Raises Growth Outlook on Demand for Job Services

Thursday, 02 August 2012 06:03 PM EDT

LinkedIn Corp., the biggest professional-networking website, forecast sales for the third quarter and full year that topped analysts’ predictions as it adds users and makes more money from recruitment services.

Revenue this quarter will be $235 million to $240 million, Mountain View, California-based LinkedIn said Thursday in a statement. Full-year sales will be $915 million to $925 million, above the $880 million to $900 million LinkedIn projected in May. Analysts on average were predicting third-quarter sales of $236.3 million and 2012 revenue of $906.3 million, according to data compiled by Bloomberg.

Chief Executive Officer Jeff Weiner has added users and increased revenue from hiring services, the largest of the company’s three main product lines. The first among social media companies to hold initial share sales since early 2011, LinkedIn has done a better job than consumer-focused peers Facebook Inc. and Zynga Inc. at wringing sales from a growing user base. It’s also more adept at managing investors’ expectations, said Tom Forte, an analyst at Telsey Advisory Group.

“Their execution since becoming public has been the best of the newly minted Internet companies,” said Forte, who’s based in New York. “This has been a consistent beat-and-raise story.”

Shares rose 5 percent to $98.16 in extended trading. Earlier, the stock fell 2.2 percent to $93.51 at the close in New York, and it has increased 48 percent this year.

Falling Profit

Sales in the second quarter also topped predictions, increasing 89 percent to $228.2 million, compared with the $216.5 million average analyst estimate compiled by Bloomberg.

Profit declined as Weiner increased spending aimed at recruiting more business from employers seeking to hire. Net income fell to $2.81 million, or 3 cents a share, from $4.51 million, or 4 cents, a year earlier. Profit excluding some items was 16 cents, matching estimates. Costs soared 93 percent to $214.7 million, with sales and marketing more than doubling to $75.7 million.

LinkedIn grew to 175 million members, up from 161 million in the first quarter, as more people accessed the site from mobile devices such as Apple Inc.’s iPad, LinkedIn said.

Last month, LinkedIn revamped its home page to highlight the activities of a member’s professional connections, including what articles they have read and what changes they have made to work profiles. The changes have resulted in record levels of activity, the company said today.

Facebook and Zynga have both declined after reporting second-quarter results that disappointed investors. Facebook, down 47 percent since its May IPO, is struggling to accelerate sales growth, while Zynga, down 73 percent since its December share sale saw a drop in demand for virtual goods.

© Copyright 2024 Bloomberg News. All rights reserved.

Thursday, 02 August 2012 06:03 PM
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