LinkedIn Corp. (LNKD:US) rose after reporting third-quarter sales that exceeded analysts’ estimates as the biggest professional-networking website sold more subscriptions to its expanding customer base.
Shares rose as much as 9.5 percent after LinkedIn said revenue jumped 81 percent to $252 million from $139.5 million a year earlier. That topped the $244.1 million predicted (LNKD:US) by analysts, according to data compiled by Bloomberg. Net income was $2.3 million, or 2 cents a share, compared with a loss of $1.6 million, or 2 cents, the company said yesterday in a statement.
LinkedIn has revamped its profile pages and offered more features to keep users coming back even when not job hunting or recruiting. By becoming a bigger destination site, the company has collected more data that’s useful to recruiters, leading to a rise in subscription and advertising sales.
“You have a company that continues to make adjustments and refinements to improve the quality of its products,” said Tom Forte, an analyst at New York-based Telsey Advisory Group. “They clearly have one of the better business models in the Internet space and they’re doing a great job executing on it.”
The stock climbed to a high of $117 in extended trade after falling less than 1 percent to $106.85 at the close in New York yesterday. It’s up 70 percent this year and has more than doubled since the company sold shares to the public in May 2011.
LinkedIn said last month that more than 175,000 profiles are created every day, and almost a third of visits are via mobile devices.
The company, based in Mountain View, California, forecast fourth-quarter revenue of $270 million to $275 million. Analysts are projecting $273 million, according to the average of estimates compiled by Bloomberg.
The number of members rose 6.9 percent to 187 million from 175 million at the end of the second quarter. In July, LinkedIn upgraded its home page to highlight the activities of a member’s professional connections, including articles read and work profile changes. The company added more features last month. These include the ability to change information directly on a profile page, enhanced visual tools to discover what others are sharing and communication within a professional network.
Revenue from LinkedIn’s talent solutions products, formerly known as hiring solutions, climbed 95 percent to $138.4 million. The subscriptions, which are sold to recruiters, accounted for 55 percent of total sales, up from 51 percent a year earlier.
Marketing solutions, or advertising, revenue rose 60 percent to $64 million, while sales from premium subscriptions, which provide additional communication and search services, increased 74 percent to $49.6 million.
U.S. revenue accounted for 64 percent of total sales, down 1 percentage point from the second quarter. More than 70 percent of new users are coming from outside of the U.S., Chief Executive Officer Jeff Weiner said on yesterday’s conference call.
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