LinkedIn Corp. reported Thursday that its second-quarter
earnings grew faster than expected, a sign that the professional
network is seeing success as it shifts strategies in multiple
segments.
The company said its revenue rose 33% to $711.7 million in the
second quarter. The company had forecast revenue of $670 million to
$675 million, and analysts surveyed by Thomson Reuters had
estimated $680 million, on average.
For the second quarter, LinkedIn reported a loss of $67.7
million, or 53 cents a share, wider than its year-ago loss of $1
billion, or a penny a share. Excluding stock-based compensation and
other items, earnings rose to $71 million, or 55 cents a share,
from $63 million, or 51 cents a share, and finished well above the
average analyst estimate of 30 cents a share.
On the back of its strong second quarter, LinkedIn raised its
full-year revenue forecast to $2.94 billion after cutting it in
April. The company said it expects per-share earnings of $2.19 for
the full year, up from $1.90.
LinkedIn has been overhauling both its recruiting tools and
advertising segments. It also is trying to figure out how to make
its site more mobile-friendly. In April, it lowered its full-year
forecast because of a strong dollar and diminishing demand for
display advertising.
Shares of LinkedIn rose 5.8% in after-hours trading to
$240.42.
Revenue from its biggest division, Talent Solutions, a platform
recruiters can use to search for candidates on the site, increased
38% to $443.4 million. The company raised prices for its recruiting
platform earlier this year.
The company was hopeful a shift toward sponsored updates would
offset declines in demand for traditional display ads. In the
second quarter, revenue in its marketing solutions segment rose 32%
to $140 million.
LinkedIn wants users to stay on the site longer and use it as a
social platform, not just to update their ré sumé s and search for
jobs. In the first quarter, more than half of LinkedIn members
accessed the site on mobile for the first time. Increased
engagement is critical to LinkedIn's ability to attract
advertising.
The company is testing two new apps, following Facebook Inc.'s
lead by unbundling its services and offering a portfolio of apps.
Still the company lags behind competitors like Facebook and
Twitter, Inc. Both saw increases in advertising revenue boosted by
mobile in their reports this week.
LinkedIn also attracts about a fifth of its revenue from premium
subscribers. In the second quarter, revenue in that segment rose
22% to $128.3 million.
A recent American Customer Satisfaction Index report found
LinkedIn was the lowest-ranking social media site. Premium
subscribers paying for extra features gave the company particularly
low scores. LinkedIn has been responding to user complaints by
retooling its messaging system as well as reducing the number of
emails users receive.
This is the company's first earnings report since it closed its
acquisition of Lynda.com in May for $1.5 billion. The company's
largest acquisition to date gives LinkedIn a library of
professional training services that it hopes will encourage
LinkedIn members to spend more time on the professional
network.+
Write to Cat Zakrzewski at cat.zakrzewski@wsj.com
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