NEW YORK, Oct 22 — EBay Inc reported a stronger-than-expected quarterly profit and raised its full-year adjusted profit forecast, helping to allay concerns about the company's prospects following the spinoff of PayPal, its main engine of growth.
EBay, whose shares were up 8.5 per cent after-hours yesterday, faces intensifying competition from rivals such as Amazon.com Inc as well as from retailers such as Wal-Mart Stores Inc that are boosting their online presence.
PayPal Holdings Inc, a leader in the fast-growing payment processing market, became a separate company on July 18.
“The worst case scenario kind of came off the table,” said Steve Weinstein, a senior analyst at ITG Investment Research.
“I think the Street was preparing for something really bad.”
Instead, the company raised its forecast for adjusted profit from continuing operations for the full year to US$1.80-US$1.82 (RM7.73-RM7.82) per share from US$1.72-US$1.77. Analysts on average were expecting a profit of US$1.78 per share, according to Thomson Reuters.
The increase reflects earnings performance in the second quarter as well as the repurchase of shares and a more favourable tax rate, Chief Financial Officer Scott Schenkel said on a call.
EBay added a net eight million new active buyers in the three months ended Sept. 30 compared with a year earlier.
But while this was an increase of five per cent, it was a far cry from the double-digit growth rates achieved until about two years ago.
Ebay has had to work hard to win back user confidence after a security breach in May last year compromised the data of about 145 million customers.
The company was also hurt by a change in Google's algorithm, which pushed its results lower in search rankings.
EBay's net income fell to US$539 million, or 45 cents per share, from US$673 million, or 54 cents per share, a year earlier.
However, excluding items the company earned 43 cents per share, beating the average estimate of 40 cents.
Net revenue fell to US$2.1 billion from US$2.15 billion but was up about five per cent after excluding changes in currency rates. Analysts on average had expected revenue of US$2.09 billion.
Gross merchandise volume fell two per cent including the effect of currency but grew six per cent on an forex-neutral basis.
“We are not settling comfortably into a five per cent or six per cent growth rate. We are not satisfied with that,” a company executive said on the call.
Up to yesterday's close of US$24.21, eBay's shares had fallen about 13 per cent since July 17. PayPal's shares dropped about 18 per cent. — Reuters
