LinkedIn raises forecast on robust demand for hiring services
LinkedIn Corp,the operator of the world’s largest online network for professionals, raised its 2016 revenue and profit forecast as demand rises for its hiring services and its advertising revenue growth accelerates.LinkedIn shares, which have lost more than a third of their value since the company reported fourth-quarter results on Feb. 4, rose 7.6 percent in extended trading on Thursday.
The company seems to have benefited from an improving jobs market in the United States. The region accounts for more than 60 percent of LinkedIn’s total revenue.
Revenue from its talents solutions business, which connects recruiters and job seekers, surged 41 percent in the first quarter, contributing nearly two-thirds to total revenue.Its advertisement revenue grew 29 percent, the strongest growth in three quarters. The company is moving to sponsored content from traditional display ads and strengthening its mobile app to improve user engagement.
The ad business “doing better is definitely a healthy sign as that’s been a segment that people have been concerned about in particular,” Sterne Agee CRT analyst Arvind Bhatia said.
LinkedIn said its total users rose 19 percent to 433 million, driven by strong growth in China.The company raised its full-year forecast for adjusted profit to $3.30-$3.40 per share from $3.05-$3.20 and for revenue to $3.65 billion-$3.70 billion from $3.60 billion-$3.65 billion.
However, its loss widened as costs surge 41.5 percent due to heavy investments in data centers and expansion in markets outside the United States.
LinkedIn opened a data center in Singapore this month – its first outside the United States – to better serve its growing user base in Asia Pacific.
The net loss attributable to LinkedIn widened to $45.8 million, or 35 cents per share, from $42.5 million, or 34 cents per share, a year earlier.Excluding items, the company earned 74 cents per share, beating the average analyst estimate of 60 cents, according to Thomson Reuters I/B/E/S.
Revenue jumped 35 percent to $860.7 million, topping the average estimate of $828.5 million.LinkedIn shares were trading at $132.30 after the bell.