EBay profit tops forecasts on higher sales
EBay Inc. (EBAY-Q) reported a higher than expected quarterly profit as more people bought items on its auction site and its PayPal payment system was used by more merchants.
EBay said first quarter revenue rose 15.9 percent to $2.55 billion US, fueled by a 23 percent rise at PayPal and a 12 percent increase at its marketplaces, beating Wall Street forecasts of $2.48 billion.
EBay is in the final stages of a multi-year plan to revitalize its marketplaces unit, whose growth has slowed in recent years, hoping to make it more appealing for people to shop on ebay.com.
"It's proof that eBay is doing a good job of matching buyers with quality sellers," said Colin Gillis, an analyst with BGC Partners.
EBay also gave revenue forecasts for the current quarter and for 2011 that beat Wall Street expectations.
Gross merchandise volume excluding vehicles, a closely watched measure of the total value of goods sold, rose 8 percent to $14.5 billion, faster than Gillis expected.
During the first quarter, which ended March 31, active users of ebay.com rose 5 percent to 95.9 million.
PayPal has led the company's revenue growth for years, while its marketplaces unit has matured. Last year, revenues at PayPal grew nearly three times faster.
But the marketplaces' 8 percent revenue growth was faster than the 12 percent clip for all of 2010.
Net income for the first quarter, which ended on March 31, was $476 million, or 36 cents per share, compared with $398 million, or 30 per share, a year earlier. On an adjusted basis, eBay earned 47 cents per share, beating analyst forecasts by a penny, according to Thomson Reuters I/B/E/S.
For the current quarter, eBay is expecting adjusted earnings of 45 cents to 46 cents per share on revenue between $2.55 billion and $2.65 billion. That compares to analyst forecasts of 46 cents per share on revenues of $2.52 billion.
For all of 2011, eBay forecast adjusted earnings of $1.93 to $1.97 per share on revenues of $10.6 billion to $10.9 billion, above analyst forecasts of $1.94 per share on revenues of $10.48 billion.