LinkedIn reports unexpected profit as site adds paying users
LinkedIn Corp., the largest professional-networking website, unexpectedly reported a second-quarter profit as it lured new members following a May initial public offering.
Profit excluding certain costs was $10.8 million, or 10 cents a share, the Mountain View, Calif.-based company said Thursday. Sales soared to $121 million. Analysts on average had predicted a loss of 1 cent a share on $106.4 million in revenue, according to data compiled by Bloomberg.
LinkedIn, the first U.S. social network to sell shares to the public, has been hiring sales staff and working to add features in an effort to attract more professionals to its site internationally. LinkedIn, which has 115.8 million members, gets revenue from advertising and by offering recruiting and communications services to corporate customers.
“The company has been very aggressive at adding sales personnel as well as investing in product development,” said Timothy McHugh, an analyst at William Blair & Co. in Chicago. “Top line matters much more than expenses for this company right now.”
LinkedIn said revenue in the current quarter will be $121 million to $125 million. Analysts had projected $113.9 million, according to Bloomberg data.
Bolstered by publicity from its IPO, LinkedIn passed Myspace in June to become the second-largest social network in the U.S., with 33.9 million visitors, up 63 percent from a year earlier. LinkedIn members can post their profiles on the site for free and use it to find jobs, while companies pay to give their recruiters more information about potential hires. LinkedIn gets about 70 percent of its revenue from business subscriptions.
LinkedIn’s IPO helped usher in a wave of technology offerings, the most since the dot-com bubble burst in 2000, according to Bloomberg data. LinkedIn raised $352.8 million in its IPO, selling 7.84 million shares at $45 apiece.
The stock’s value has more than doubled since its debut on the New York Stock Exchange. The shares lost $10.13, or 9.6 percent, to $95.52 on Thursday.
