EBay Profit Tops Estimate

By RTT News, 
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(RTTNews.com) - E-commerce giant eBay Inc. ( EBAY ) said Wednesday after the markets closed that its second quarter profit rose 6% fro last year, helped by continued strong growth in its PayPal and Marketplaces businesses.

The company's quarterly earnings per share, excluding items, just managed to beat analysts' estimate, but its quarterly revenue fell shy of analysts' forecast.

At the same time, the company forecasts third quarter revenue and earnings below analysts' current consensus estimates. The company lowered the high end of its full year revenue forecast, but maintained its earnings outlook.

"In a challenging second quarter, our commerce and payments platforms delivered strong enabled commerce volume growth of 26 percent," said eBay Inc. President and CEO John Donahoe. "PayPal generated another strong quarter while eBay's growth was hampered by its global password reset for all users."

eBay shares are currently gaining 0.97% in after hours trading after closing the day's regular trading session at $50.70, down 11 cents. The shares trade in a 52-week range of $48.06 to $59.70.

Second quarter net revenues from the company's Marketplaces business, which consists of eBay, Shopping.com, StubHub, eBay Classifieds and other e-commerce sites, rose 9% to $2.2 billion.

Gross merchandise volume in the second quarter increased 12% year over year to $20.5 billion.

Marketplaces gained 3.8 million new buyers to end the quarter with 149 million active buyers, up 14% from a year earlier.

Revenue from the company's PayPal business increased 20% to $1.9 billion in the second quarter. PayPal gained 4.0 million new active registered accounts in the period and ended the quarter with 152 million active registered accounts, a 15% increase over last year. PayPal's net total payment volume, or TPV, jumped 29% to $55 billion in the second quarter.

In May, eBay asked users to change their passwords because of a cyberattack that compromised a database containing encrypted passwords and other non-financial data. However, there was no evidence of the compromise resulting in unauthorized activity for eBay users, and no evidence of any unauthorized access to financial or credit card information, which is stored separately in encrypted formats.

For the second quarter ended June 30, 2014, eBay reported net income of $676 million or $0.53 per share, compared to $640 million or $0.49 per share for the year-ago quarter.

Excluding items, adjusted net income for the second quarter was $868 million or $0.69 per share, compared to $822 million or $0.63 per share in the prior year quarter.

On average, 37 analysts polled by Thomson Reuters expected the company to earn $0.68 per share for the second quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter narrowed to 18.2% from 19.3% a year ago, while adjusted operating margin shrank to 24.4% from 26.3% last year.

Net revenues for the second quarter rose 13% to $4.37 billion from $3.88 billion in the same quarter last year. Thirty-six analysts had a consensus revenue estimate of $4.38 billion for the second quarter.

The company repurchased 32.4 million shares of its common stock for about $1.7 billion during the second quarterand ended the quarter with about $2.2 billion share repurchase authorization remaining.

Looking forward to the third quarter, the company forecasts revenues $4.300 billion to $4.400 billion, net earnings of $0.51 to $0.53 per share and adjusted earnings of $0.65 to $0.67 per share. Analysts currently expect the company to earn $0.70 per share on revenue of $4.42 billion for the third quarter.

For the full year 2014, the company continues to forecast net earnings of $0.04 to $0.09 per share and adjusted earnings of $2.95 to $3.00 per share. The company now forecasts full year 2014 net revenue of $18.00 billion to $18.30 billion, compared to its prior forecast of $18.00 billion to $18.50 billion.

Analysts currently expect the company to earn $2.98 per share on revenue of $18.24 billion for the full year 2014.

eBay and Sotheby's ( BID ) said Monday that they have teamed up to develop an innovative online platform that will make it easier for millions of people worldwide to discover, browse and acquire exceptional works of art, antiques and collectibles. eBay will shortly be launching a newly-designed experience on its site, tailored for collectors of rare, unique and premium art and collectibles as well as first-time buyers. Sotheby's will be the preeminent anchor tenant in the revamped marketplace, which will include a new live auction feature and real-time bidding from anywhere around the world.

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This article appears in: Earnings

Referenced Stocks: BID , EBAY , TRI

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