(Corrects LinkedIn vice president’s name in 14th paragraph.)
July 31 (Bloomberg) -- LinkedIn Corp. gave a third-quarter sales forecast that topped estimates as the largest professional-networking website rolled out new products to reignite growth, sending the shares higher in extended trading.
Revenue will be $543 million to $547 million in the current period, the Mountain View, California-based company said in a statement today, topping analysts’ average projection for $541.5 million, according to data compiled by Bloomberg.
Chief Executive Officer Jeff Weiner has been branching out from recruiting and subscriptions, introducing a website in China and offering services for salespeople looking for new clients. He’s also investing in original content and new smartphone applications. The measures helped to boost revenue by 47 percent to $533.9 million in the second quarter, beating analysts’ estimates as growth picked up again after five quarters of slowing sales.
“For the past five quarters, they guided below Street estimates, and this is the first quarter for the past five quarters that they’ve guided above Street estimates -- it’s definitely a positive,” said Neil Doshi, an analyst at CRT Capital Group LLC, who rates the stock a buy.
The shares of LinkedIn gained as much as 15 percent in extended trading, after declining 3.6 percent to $180.64 at the close in New York. The company’s stock, which gained 89 percent last year, has slumped 17 percent this year.
LinkedIn reported a second-quarter net loss of $1.03 million, compared with net income of $3.73 million a year earlier.
LinkedIn’s professional networking service has been expanding into new product categories and last week said it agreed to buy Bizo Inc., a business-marketing startup, for $175 million. Bizo will add $3 million in revenue in the current period and $6 million the next, Steve Sordello, LinkedIn’s chief financial officer, said during a conference call.
Profit, excluding some items, was 51 cents a share in the second quarter, exceeding analysts’ average estimate for 39 cents on revenue of $511 million.
Membership increased to 313 million in the latest quarter, up 32 percent from a year earlier.
“China has become the fastest growing major market in terms of new members,” Weiner said on the call.
LinkedIn also added more than 2,200 accounts within the recruiting services segment and had healthy renewal rates, Sordello said.
“They’re still in the early innings of capturing a longer- term opportunity,” said James Cakmak, an analyst at Telsey Advisory Group. “A suite of products improving the user experience and improving analytics will drive long-term value.”
Separately, the company unveiled a new website today for salespeople called Sales Navigator, which uses LinkedIn data to find potential customers. The product, which costs $1,200 a year, helps marketers manage their connections, drawing on relationships within their professional network.
“Salespeople have recognized that LinkedIn is not just a place to find a job -- far from it,” Mike Derezin, LinkedIn’s vice president of sales solutions, said in an interview. “It’s a place to grow and build relationships.”
By making a separate product, LinkedIn can tailor the experience more to the sales job and charge more for it, like it did for recruiters, Derezin said.
“Everything that we wanted to see is coming into fruition: you see solid additions across corporate customers, the traction in sponsored updates is certainly there, and the long-awaited enterprise centric Sales Navigator solution has finally launched,” Cakmak said.