LinkedIn Earnings Top Expectations

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 [e-mail]

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