(Reuters) - Professional social network LinkedIn Corp topped Wall Street’s third-quarter profit and revenue targets, as advertising rates increased and sales from its hiring services nearly doubled.
Shares of LinkedIn gained nearly 8 percent to $115.15 in after-hours trading on Thursday, as the company extended its streak of beating analyst expectations every quarter since its May 2011 initial public offering.
“They seem to be firing on all cylinders,” said Macquarie Research analyst Tom White.
“They continue to penetrate enterprises with their talent solutions business and continue to have plenty of upside opportunity there,” he said.
LinkedIn connects professionals seeking jobs and companies looking for employees. The company makes money from selling ads and premium subscriptions, as well as from offering specialized services to recruiters, setting it apart from its ad-dependent social networking rivals such as Facebook Inc and Twitter.
The company raised its full-year revenue forecast on Thursday, projecting total revenue to range between $939 million and $944 million, compared with its prior range of $915 million to $925 million.
Chief Executive Jeff Weiner said on a conference call on Thursday that the online service now had 187 million members and that members are spending more time on the website.
“Member page views grew 44 percent, well in excess of unique visitor growth, indicating that members are becoming increasingly active on LinkedIn,” said Weiner.
LinkedIn has rolled out a number of new features and enhancements to its website in recent months as it tries to entice its members to spend more time on its website. Traffic to LinkedIn’s home page increased 60 percent since a website redesign that it rolled out during the third quarter.
Analysts say that the so-called user engagement levels on LinkedIn remain well below websites such as Facebook and Google, limiting the amount of advertising revenue that LinkedIn can reap.
LinkedIn Finance Chief Steve Sordello acknowledged during the call on Thursday that advertiser demand was greater than the advertising inventory available on its website.
Still, marketing revenue increased 60 percent year-on-year to $64 million in the third quarter, helped by a rise in advertising rates.
“The company is deploying its field sales where it’s signing on bigger deals,” said Susquehanna Financial Group analyst Herman Leung.
LinkedIn said it posted net income of $2.3 million, or 2 cents a share, during the three months ended September 30, compared with a net loss of $1.6 million, or 2 cents a share, in the year-ago period.
Excluding certain items, LinkedIn said it earned 22 cents a share in the third quarter, above the 11 cents expected by analysts polled by Thomson Reuters I/B/E/S.
Revenue in the third quarter was $252 million, up 81 percent year-over-year and ahead of the average analyst expectation of $244.2 million.
The Mountain View, California-based company said that revenue from its talent solutions services increased 95 percent year-on-year in the third quarter to $138.4 million and that the business added 1,700 new customers.
Shares of LinkedIn, which closed Thursday’s regular session at $106.85, have fallen 15 percent since mid-September but are up roughly 70 percent in 2012.
Reporting by Alexei Oreskovic in San Francisco; Editing by Matthew Lewis, Gunna Dickson, Gary Hill