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: Underfire Uber ramps up rider safety

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

Underfire Uber ramps up rider safety

1 hour ago

Uber is ramping up driver background checks and other security measures worldwide after the smartphone-focused car-sharing service was banned in New Delhi following the alleged rape of a passenger.

Sony cancels NKorea parody film release after threats

1 hour ago

Hollywood studio Sony Pictures on Wednesday abruptly canceled the December 25 release date of "The Interview," a parody film which has angered North Korea and triggered chilling threats from hackers.

Sprint accused of billing for unwanted services

6 hours ago

(AP)—Federal regulators are accusing Sprint Corp. of illegally billing its wireless customers hundreds of millions of dollars in charges for text message alerts and other services that they didn't order.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.