EBay more than doubles 2Q earnings, revenue up (Update)

Jul 18, 2012 by BARBARA ORTUTAY

(AP) — EBay Inc. more than doubled its second-quarter net income thanks to higher revenue from its PayPal online payments business and its e-commerce websites.

The solid results, which came against the backdrop of the ongoing European economic turmoil, prompted investors to send the company's stock up nearly 6 percent in after-hours trading.

"It was an excellent quarter almost across the board," said Wedbush analyst Gil Luria. "It's a sign that eBay continues to do really well and can continue to do well for many years to come."

The growing use of smartphones and tablet computers to shop helped eBay sweep aside the economic woes affecting brick-and-mortar retailers. More people are using their smartphones and tablet computers to shop, which means they are more likely to shop on eBay, Luria said.

While eBay's PayPal business has been going strong for several quarters, a real surprise was its marketplaces business, which consists mainly of its namesake e-commerce site. Though the company wasn't expecting a decline, many investors had braced for a deceleration of growth, in large part because of Europe. But CEO John Donahoe said the marketplaces business saw its strongest growth since 2006.

Marketplaces' gross merchandise volume, an important metric that measures all items sold on eBay excluding vehicles, rose 10 percent to $16 billion.

In all, eBay earned $692 million, or 53 cents per share, in the April-June period. That's up from $283 million, or 22 cents per share, in the same period a year earlier.

Adjusted earnings were $730 million, or 56 cents per share, in the latest quarter — a penny above analysts' expectations.

Revenue grew 23 percent to $3.4 billion from $2.76 billion. Analysts, on average, were expecting revenue of $3.36 billion, according to FactSet.

The San Jose, California-based company makes most of its money by charging merchants a fee to list items posted for sale. It also generates revenue from PayPal transaction fees. Besides its namesake online marketplace, eBay also owns StubHub, the ticket-selling website, Shopping.com and GSI Commerce, a provider of e-commerce and online marketing services.

The company is expanding PayPal beyond the Internet, offering payment services to brick-and-mortar stores and to mobile devices. Earlier this year, the company unveiled a mobile payments service for merchants called PayPal Here. It lets customers pay using credit cards, PayPal accounts or, in the U.S., personal checks using merchants' mobile phones.

The growth of mobile shopping will likely continue to propel eBay's earnings. The company expects eBay and PayPal to each conduct $10 billion in transactions in 2012, more than double 2011's transactions. Donahoe called it "a staggering surge in mobile shopping and payments on devices that did not exist just a few years ago."

For the current quarter, eBay is forecasting adjusted earnings of 53 cents to 55 cents per share. That compared with analysts' expectations of 55 cents. It is expecting revenue of $3.3 billion to $3.4 billion, while analysts are predicting $3.41 billion.

PayPal ended the quarter with 113.2 million active accounts, up 13 percent from a year earlier.

EBay's stock climbed $1.90, or 4.7 percent, to $42.36 in after-hours trading. The stock had closed up $1.39, or 3.6 percent, at $40.46 — up 33 percent year-to-date.

Explore further: Ticketfly buying WillCall for on-premise data

not rated yet
add to favorites email to friend print save as pdf

Related Stories

EBay posts higher 1Q net income and revenue

Apr 18, 2012

(AP) -- EBay's first-quarter net income grew 20 percent thanks to higher revenue from its PayPal business and brisk sales at its e-commerce websites. The results beat Wall Street's expectations and investors sent the company's ...

EBay first-quarter profit rises 20 percent

Apr 27, 2011

(AP) -- EBay Inc. on Wednesday said its first-quarter profit rose 20 percent on reinvigorated auctions activity and continued swift growth at its PayPal payment service.

CenturyLink 3Q net income falls as expenses rise

Nov 02, 2011

(AP) -- Phone company CenturyLink Inc. says its third-quarter net income fell as rising operating expenses related to its April acquisition of larger phone company Qwest overshadowed increased revenue.

EBay reports higher 4Q earnings, revenue (Update)

Jan 18, 2012

(AP) -- EBay reported on Wednesday that its net income grew sharply in the fourth quarter, helped by a gain from the sale of its remaining investment in Skype. Its results beat Wall Street's expectations, ...

EBay profit falls on charges, results beat Street

Jul 20, 2011

EBay Inc.'s PayPal online payment service and marketplaces business grew swiftly during the second quarter, helping its results beat analyst expectations, although charges from its recent purchase of retail ...

EBay 3Q profit rises 23 percent

Oct 20, 2010

(AP) -- EBay Inc. on Wednesday said its third-quarter profit climbed 23 percent, helped by its growing PayPal business.

Recommended for you

Oregon sues Oracle over failed health care website

6 hours ago

Oregon Attorney General Ellen Rosenblum says she's filed a lawsuit against Oracle Corp. and several of its executives over the technology company's role in the state's troubled health insurance exchange.

Google buys product design firm Gecko

6 hours ago

Google on Friday confirmed that it bought Gecko Design to bolster its lab devoted to technology-advancing projects such as self-driving cars and Internet-linked Glass eyewear.

Ticketfly buying WillCall for on-premise data

Aug 21, 2014

Ticketfly Inc., a San Francisco-based technology company among several posing a challenge to Ticketmaster, is acquiring WillCall Inc., a crosstown rival that turns your smartphone into a mobile wallet at live events.

HP revenue inches up after years of decline

Aug 20, 2014

Hewlett-Packard on Wednesday reported that its quarterly revenue rose for the first time in three years, nudged by improved computer sales everywhere except Russia and China.

Restaurants experimenting with pay-in-advance tickets

Aug 20, 2014

With restaurant patrons increasingly jumping on the Internet to make reservations, some high-end eateries here and across the country are adding a new tech wrinkle: having their clientele pay for their meal in advance using ...

User comments : 0