LinkedIn Results Top Expectations

LinkedIn Corp. reported a wider third-quarter loss reflecting higher expenses as the professional network retools its business—but shares climbed after hours as revenue and adjusted profit topped Wall Street's expectations.

The Mountain View, Calif., posted a loss of $40.5 million, or 31 cents a share, compared with a loss of $4.3 million, or 3 cents per share, in the same period a year earlier.

Revenue rose 37% to $779.6 million, from $568.3 million in the year-ago period.

But spending rose faster, particularly in its product development and marketing divisions.

Excluding some expenses, LinkedIn said it would have earned 78 cents a share. Analysts, on average, expected the company to earn 46 cents a share on that basis, according to Thomson Reuters. The analysts had projected revenue of $755.8 million.

LinkedIn shares jumped 8% in after-hours trading. So far this year, the stock has fallen about 6% while the Nasdaq Composite has risen about 7% and rival Facebook Inc. shares have leapt 35%.

LinkedIn has been spending to boost its appeal to its core corporate customers, capitalize on advertising growth and overhaul its mobile presence. It lowered its earnings forecasts each of the last two quarters, reflecting the pressure facing its core business. It surpassed expectations in the second quarter, on the strength of its $1.5 billion acquisition of lynda.com a skills-training video library.

The company draws about 60% of its revenue from its largest division, Talent Solutions, a platform for recruiters to search for candidates. That sets LinkedIn apart from other social media companies that draw most of their revenue from advertising.

At a company event for recruiters in Anaheim, Calif. this month, LinkedIn CEO Jeff Weiner announced an overhaul of its mobile app, dubbed Project Voyager. LinkedIn users tap its mobile app significantly less often than users of other social networks.

Evercore ISI analyst Ken Sena says only 17% of the time U.S. users spend on LinkedIn is through the mobile app, compared with 76% of time in the mobile app by Facebook users. Mr. Sena says 63% of the time on LinkedIn in the U.S. is through personal computers.

By Deepa Seetharaman