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LinkedIn jumps as earnings beat forecast

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LinkedIn beat expectations in its second quarter, sending shares in the social network for professionals up by up to 12 per cent in after-hours trading in New York.

The Silicon Valley-based company reported non-GAAP earnings per share of 51 cents, significantly higher than the 39 cent consensus forecast.

But the company was in the red on a GAAP basis, reporting a net loss of $1m in the second quarter, compared with a net income of $3.7m for the same period the year before.

Revenue in the second quarter was $534m - up almost 50 per cent from the same quarter in 2013 - and slightly above the average analyst estimate of $511m.

Jeff Weiner, chief executive, said it had delivered "strong financial results" while maintaining investment.

"We made significant progress against several key strategic priorities including increasing the scale of job opportunities on LinkedIn; expanding our professional publishing platform; and continuing the strategic shift towards content marketing through sponsored updates," he said in a statement.

LinkedIn wants to grow from a database of online resumes to a map of the world's skills and economic opportunities. It has plans to expand in China, ramp up a subscription product for sales people and improve its job listings.

The company also issued a moderately better than expected outlook for the rest of the year, after disappointing the market with its cautious guidance in the two previous quarters, contributing to a share price fall of about 17 per cent since the start of the year.

LinkedIn said it now had over 300m users and some 60 per cent of its revenue comes from its talent solution business. Unlike other social networks such as Facebook and Twitter, which are dependent on advertising revenue, LinkedIn makes money from services it sells to recruiters eager to find job candidates through the platform.

The social network swung to a loss in its first quarter, with earnings dragged down by employee stock compensation and amortisation of acquisition. At the time it also cautioned about the outlook two consecutive quarters, telling Wall Street that it planned to spend the year investing in the business.

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