Corporate networking site LinkedIn Corp reported better-than-expected quarterly profit and revenue as more businesses used its services to hire staff.
The company’s hiring business has been thriving as employers find its services more helpful in assessing a candidate’s suitability for a role.
Strong growth in the hiring business and rapid expansion in international markets such as China are considered by analysts to be the main growth drivers for the company in the next few quarters.
“In third-quarter, about 75 percent of new members came to LinkedIn from outside the U.S., with China providing particular strength,” Chief Executive Jeff Weiner said.
“China has become the second-largest contributor to new sign-ups on a daily basis, after only the United States,” Weiner said on a conference call with analysts.
The company launched a Chinese language “beta” version of its main website in February to expand in the world’s largest internet market by users, looking to replicate its success in the United States internationally.
Revenue at LinkedIn’s hiring business, called Talent Solutions, rose 45 percent in the third quarter ended Sept. 30, representing 61 percent of total revenue.
LinkedIn, however, forecast on Thursday current-quarter results below expectations, sparking a brief selloff that sent the company’s shares down as much as 11 percent in extended trading.
But the shares soon reversed course to trade up 3 percent at $209.12 as investors focused on the handy third-quarter beat.
BMO Capital Markets analyst Daniel Salmon said investors chose to focus on customer growth in the third quarter in the company’s corporate solutions business, rather than the weak revenue forecast.
LinkedIn’s net loss attributable to stockholders widened to $4.3 million, or 3 cents per share, in the quarter, from $3.4 million, or 3 cents per share, a year earlier. Excluding items, LinkedIn earned 52 cents per share.
Revenue rose 45 percent to $568.3 million.
Analysts on average had expected a profit of 47 cents per share on revenue of $557.6 million.
For the fourth quarter ending December, LinkedIn forecast adjusted earnings of about 49 cents per share and revenue of between $600 million and $605 million.
Analysts on average were expecting a profit of 52 cents per share on revenue of $611.6 million, according to Thomson Reuters I/B/E/S.
On revenue forecast missing the estimate, BMO’s Salmon said it was more likely that the expectations were a little higher.
Up to Thursday’s close, the stock had fallen more than 6 pct this year, underperforming the 7.9 percent rise in the broader S&P 500 index .SPX. (Reuters)