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http://e-commerceguide.com/essentials/ebay/article.php/3894271
By David Needle July 21, 2010 Ecommerce giant eBay (NASDAQ: EBAY) had reason to cheer today, posting second-quarter figures that topped Wall Street estimates due in part to a record performance from its PayPal unit. The company posted a quarterly profit of $4.12 million or $0.31 per share, with non-GAAP income coming in at $530.2 million, or $0.40 per share -- an 18 percent increase over the same quarter last year. Analysts polled by Thomson Reuters expected a non-GAAP increase of only $0.38 per share. The increase in income excludes Internet phone unit Skype, which eBay sold off last year in a $1.9 billion deal while retaining a 35 percent in the firm. Revenue for the second quarter increased 6 percent to $2.2 billion compared to the same quarter a year ago, or 15 percent excluding Skype. The total was just ahead of analyst estimates, according to Thomson Reuters. eBay credited a record performance at it payments unit, PayPal, with a good deal of the success. The unit added three million accounts during the quarter, it said, while PayPal's merchant services business grew 40 percent year over year. The news comes at a time when eBay looks to distance itself from the money-losing Skype acquisition, which was a drain on profits, and grow its core auction and ecommerce business -- all key elements of a turnaround spearheaded by President and CEO John Donahoe. "We delivered strong second-quarter results, demonstrating the global strength and increasing diversity of our business," Donahoe said in a statement. "PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of ecommerce. And our eBay turnaround remains on track, with strong performance in Europe, significant changes in the U.S. and continued improvements to the buying and selling experience. We continue to focus on delivering strong financial results, managing a healthy balance sheet and making the necessary investments to compete, win and satisfy our customers." For 2010, eBay said it expects PayPal to continue its performance, contributing about $100 million to full-year net revenues and $0.06 to $0.08 per share. Company officials also said they anticipate eBay's Marketplaces business, despite continued slow growth in the U.S., to continue its rapid pace in Europe. Despite the quarter's strong showing, though, eBay slightly reduced the full-year guidance it provided in January and later reaffirmed in April, owing at least in part to the effects of a stronger-than-expected U.S. dollar. As a result, the company said full-year revenues would come in at between $8.8 billion and $9.0 billion -- an increase of 9 percent to 11 percent over 2009, excluding Skype. Earnings per share, on a GAAP basis, would also come in between $1.23 and $1.28, while non-GAAP earnings could range from $1.60 to $1.65, up 9 percent to 12 percent, again excluding Skype's earlier impact. David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals. |
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