(Reuters) – LinkedIn Corp raised its outlook after smashing first- quarter revenue and profit expectations, racking up strong growth from services that help companies find and hire employees.
“The guidance was surprisingly high,” said Ken Sena, an analyst with Evercore Partners. “I think it’s a matter of them being able to use the data they have more efficiently to drive better results for their partners.”
The company increased its 2012 revenue outlook on Thursday by $ 40 million to a range of $ 880 million to $ 900 million.
LinkedIn shares were up 10 percent in after-hours trading at $ 120.50 from their $ 109.41 close.
The company, based in Mountain View, California, was one of the first prominent U.S. social networking sites to make a debut in an initial public offering a year ago, whetting the appetites of those eagerly awaiting Facebook’s impending IPO. [ID:nL1E8G3JMT]
With more than 161 million members worldwide, LinkedIn is being closely watched by investors to see if its business model is solid.
LinkedIn shares are up nearly 70 percent year-to-date and are more than double its IPO price of $ 45.
A combination of international growth expansion and a hiring spree in order to generate more sales are behind the company’s revised forecast, said Kerry Rice, an analyst with Needham & Co.
“LinkedIn has the best value out there,” said Rice about companies seeking employees.
SNAPPING UP SLIDESHARE
LinkedIn also announced on Thursday that it acquired content sharing company SlideShare for $ 118.75 million in a mix of cash and stock. The service lets professionals upload presentations and share them with others.
The company was started in the living room of former PayPal executive Reid Hoffman, who co-founded LinkedIn in 2002. It makes money by selling services and subscriptions to individuals seeking jobs and companies looking to hire.
LinkedIn reported first quarter revenue rose 101 percent to $ 188.5 million, besting analysts’ average forecast of $ 178.58 million, according to Thomson Reuters I/B/E/S.
The top line results were bolstered by the strong performance of the company’s three units.
Revenue at its hiring solutions division, which represents more than half of total revenue, jumped 121 percent, while it grew 73 percent at its marketing solutions unit that sells display advertising.
“I think marketing solutions is the biggest surprise in terms of how much the numbers beat, given the weakness out of Yahoo,” said Herman Leung, a senior analyst with Susquehanna Financial Group, which holds a stake in LinkedIn.
Premium subscriptions — offered to members for more specialized services — saw revenue increase 91 percent.
Excluding special items, first-quarter earnings per share of 15 cents was well above analysts’ expectations of 9 cents per share.
Net income rose to $ 5 million from $ 2.1 million in the same quarter a year ago.
(Editing by Bernard Orr, Tim Dobbyn, Andre Grenon and Phil Berlowitz)