YELP Yelp Inc

Online reviews site Yelp Inc. on Tuesday raised its revenue projection for the year again as it swung to a quarterly profit, though the San Francisco company struggled to attract users in the second quarter.

Shares, which set a 52-week-high last week, rose 7% to $34.81 in after-hours trading on the better-than-expected financial results and strong revenue projections.

Yelp also said Chief Operating Officer Geoff Donaker will be leaving the post after 11 years with the company, though he will stay on as a strategic adviser and will continue serving on the company's board. Mr. Donaker will be succeeded by Jed Nachman, most recently the company's chief revenue officer.

Founded in 2004, Yelp went public in 2012 amid investors' frenzy for fast-growing internet companies. But Yelp, which largely makes money by selling advertisements, has struggled to remain profitable.

The company, which last year called off plans to sell itself, has amassed millions of consumer reviews for small businesses, from restaurants to dentists' offices and hair salons, but results have faltered amid intense competition from the likes of internet giant Google, now part of Alphabet Inc. Google, which once tried to buy Yelp, has been pushing its own listings.

Yelp relies on search engines like Google to attract users.

Yelp reported about 69 million average monthly unique visitors on mobile, roughly unchanged from the previous quarter but down from the 83 million it reported in the year-ago period, with roughly 23 million unique devices using its app, compared with 21 million in the previous quarter. In addition, about 73 million unique visitors accessed Yelp on desktop, the company said, compared with 77 million in the previous quarter and 79 million a year earlier.

Over all, Yelp reported second-quarter profit of $449,000, or a penny a share, compared with a year-earlier loss of $1.3 million, or 2 cents a share. Excluding stock-based compensation and other items, profit rose to 16 cents a share from 12 cents a share a year earlier.

Analysts had projected a loss of 7 cents a share.

Meanwhile, revenue rose 30%, above the company's projection, to $173.4 million, bolstered by a 32% increase in local advertising accounts. But costs rose to $174.6 million.

Gross profit margin improved to 91.3% from 90.2% a year earlier.

Yelp now expects $700 million to $708 million in revenue for the year, compared with its earlier view of $690 million to $702 million.

For the current quarter, it projects $180 million to $184 million in revenue, compared with analysts' projected $179.6 million, according to Thomson Reuters.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

August 09, 2016 17:45 ET (21:45 GMT)

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