EBay 2Q profit rises 22 percent but outlook soft
Wednesday, July 16, 2008
NEW YORK EBay Inc. said Wednesday that its second-quarter profit jumped 22 percent, as the online auction company enjoyed strong growth in its e-commerce sites and its PayPal payments service.
But eBay's outlook for the current quarter was softer than analysts had been forecasting, and the auction company's shares fell 6.6 percent in after-hours trading. The stock had gained 4.5 percent in regular trading to close at $28.10.
San Jose, Calif.-based eBay earned $460 million, or 35 cents per share, compared with $376 million, or 27 cents per share, in the year-ago quarter. Excluding certain items, eBay earned 43 cents per share.
That beat Wall Street's forecast for 41 cents per share.
EBay's revenue rose 20 percent to $2.20 billion. Analysts polled by Thomson Financial had been looking for $2.17 billion in revenue.
Revenue from eBay's marketplaces segment, which includes eBay, Shopping.com, StubHub and other e-commerce Web sites, rose 13 percent to $1.46 billion.
Sharper growth came from PayPal, whose revenue rose 32 percent to $602 million. Revenue from its online telecommunications service, Skype, rose 51 percent to $130 million.
Listings on eBay's site climbed 19 percent to 667 million during the quarter, but the company's number of active users _ an important measure of how well the company is attracting new buyers and sellers _ rose only 1.4 percent to 84.5 million.
Looking ahead, eBay expects third-quarter earnings of 30 cents to 32 cents per share, or 39 cents to 41 cents per share on an adjusted basis, and $2.10 billion to $2.15 billion in revenue.
Analysts were expecting better: adjusted earnings of 41 cents per share on $2.18 billion in revenue.
For the full year, eBay now anticipates earnings of $1.72 to $1.77 per share on an adjusted basis, and $8.80 billion to $9.05 billion in revenue. The company had predicted adjusted earnings of $1.70 to $1.75 on $8.70 to $9 billion in revenue in April.
Analysts had been looking for adjusted earnings of $1.74 per share on $9.01 billion in revenue.
Jim Friedland, an analyst at Cowen & Co., said he was concerned that the growth rate for the total value of goods for sale on eBay, or GMV, declined in the quarter compared the rate in the year-ago period excluding the positive impact of foreign exchange differences.
"As we head into the second half, it's very possible that the economy will have an even greater impact on demand both in the U.S. and internationally," he said.
Chief Financial Officer Bob Swan said on the conference call that the total value of goods for sale on the site saw an impact from a "rapid" decline in the value for vehicles sold on eBay and lower average selling prices on items.
Swan said average selling prices fell in part because of consumers moving to buying cheaper items. "I think we will continue to feel the effects of that until the economy rebounds," he said.
Also Wednesday, eBay said its president of marketplaces, Rajiv Dutta, 47, will retire in October after 10 years with the company. Lorrie Norrington, 48, who has worked as president of eBay's marketplace operations, will take his place.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.























