The logo for LinkedIn Corporation, a social networking networking website for people in professional occupations, is shown in Mountain View, Calif., on Feb. 6, 2013.Robert Galbraith //Reuters
LinkedIn Corp. forecast 2015 profit that topped analysts' estimates as the company sees increased growth in its new products geared to advertisers and salespeople.
Annual earnings, excluding certain items, will be $2.95 a share, topping the average of $2.74 of analysts' estimates compiled by Bloomberg. Sales in 2015 will be $2.93-billion to $2.95-billion, compared with the average estimate of $2.94-billion.
Chief Executive Officer Jeff Weiner has pushed LinkedIn beyond its roots as a online service for recruiters and job seekers, adding products that help businesses with their marketing, including sponsored newsfeed updates.
"The in-feed ads are a big growth driver," said James Cakmak, an analyst at Monness, Crespi, Hardt & Co., who has a buy rating on the stock. "The ability to promote sponsored posts is in demand."
Revenue in the fourth quarter climbed 44 per cent to $643.4-million, the Mountain View, Calif.-based company said Thursday in a statement. Profit excluding certain costs was 61 cents a share. Analysts estimated 53 cents a share on sales of $617.2 million.
LinkedIn shares rose 6.5 per cent to $253.54 at 4:52 p.m. New York time in extended trading. The shares have increased 11 per cent in the past 12 months.
Net income in the fourth quarter declined to $3.1-million, or 2 cents a share, from $3.78-million, or 3 cents, in the period a year earlier, the company said.
Segment Growth
All three of LinkedIn's business segments reported increased sales. Revenue from Talent Solutions, LinkedIn's core service that helps recruiters and companies find job candidates, gained 41 per cent to $369-million. Marketing Solutions, its tools for advertisers, rose 56 per cent to $153-million. LinkedIn's premium subscription segment grew 38 per cent to $121-million.
LinkedIn's members grew 25 per cent to 347 million, according to a transcript of the company's earnings conference call. Unique visitors increased 23 per cent to an average of 93 million per month.
LinkedIn expanded into China last February, where its user base has doubled to more than 8 million users by the end of 2014, the company said. Few U.S. tech companies have succeeded in the market. About 70 percent of the company's members live outside the U.S., LinkedIn said.
New Members
"The fourth quarter capped another successful year for LinkedIn, which was marked by steady member growth and strong financial results," Mr. Weiner said in the statement.
Almost half of LinkedIn's traffic comes from its mobile applications. The company has a suite of seven apps with different purposes, including recruiting, job searching and Sales Navigator, a new app for salespeople that helps find leads and manage clients.
"This creates a great user experience," said Kerry Rice, an analyst at Needham & Co. "They're one of the companies asking, 'how do we make this as simple for users as possible?'"