Tags: EBay | earnings | profit | online

EBay Revenue Beats Estimates After Increase in US Online Sales

Wednesday, 18 July 2012 04:59 PM

EBay Inc., the world’s largest Internet marketplace, reported second-quarter sales that beat analysts’ estimates, as more U.S. shoppers turned to the site to make purchases and payments.

Revenue climbed 23 percent to $3.4 billion, EBay said in a statement. That beat the $3.36 billion average analyst estimate compiled by Bloomberg. Profit excluding some items was 56 cents a share, topping the average 55 cent prediction.

Chief Executive Officer John Donahoe has increased spending on advertising and new technology to expand beyond EBay’s auction roots and let users buy items in instant sales similar to those on Amazon.com Inc.’s site. Those efforts have boosted revenue, benefiting from online sales in the U.S., which rose 15 percent in the second quarter from the previous year, according to ComScore Inc.

“We’re going to see resilient e-commerce growth,” said Dan Kurnos, a Benchmark Co. analyst. “Despite the global economic headwinds, they’re still seeing double-digit growth.”

EBay increased marketing expenses by 25 percent in 2011 from the previous year and bolstered investments in developing technology by 36 percent, data compiled by Bloomberg show.

EBay rose as much as 2.8 percent to $41.60 in extended trading. Earlier, the stock increased 3.6 percent to $40.46 at the close in New York. Shares of the San Jose, California-based company have gained 33 percent this year.

Third-quarter revenue will be $3.3 billion to $3.4 billion, the company said, compared with an average analyst projection of $3.41 billion. EBay forecast profit excluding some items of 53 cents to 55 cents a share, versus a 55-cent estimate.

PayPal revenue surged 26 percent to $1.36 billion in the second quarter, while the total value of transactions processed climbed 20 percent to $34.5 billion. PayPal had 113.2 million active accounts at the end of the three-month period, up 13 percent from a year earlier.

Over the past year, PayPal developed a card reader that plugs into a smartphone headphone jack, a bid to attract more small merchants and compete with Square Inc. It also added software to existing payment terminals at larger retail partners such as Home Depot Inc., allowing in-store purchases with PayPal.

The company acquired a startup called Card.io, which develops technology that captures credit card information through a phone’s camera, EBay said in a statement yesterday. The technology will enable customers to more easily slot cards into the PayPal digital wallet, which lets users keep credit card information from multiple providers -- including Visa Inc. and MasterCard Inc. -- in one spot.

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Wednesday, 18 July 2012 04:59 PM
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