Online auctioneer eBay slows its decline as PayPal pays off
AUCTION website eBay reported a 29 per cent fall in second-quarter profit yesterday, but saw its shares rise as it beat analysts’ expectations.
Net profit was $327.3m (£199m), or $0.25 a share, down from $460m, $0.35 a share, in the equivalent quarter of 2008, while revenues fell marginally, down to $2.1bn from $2.2bn.
Excluding one-off items, eBay booked a profit of $0.37 a share, just ahead of a consensus forecast of $0.36.
The total value of all goods sold on the website fell by 10 per cent, a slowdown in deterioration from the first quarter when gross merchandise volume slumped by 16 per cent.
Revenues in the company’s core online marketplace business fell by 14 per cent, but this was offset by a strong performance from online payment service PayPal, where revenues rose 11 per cent.
“We drove solid second quarter results, with strong momentum and market share gains at PayPal and continued stabilisation in our core eBay business,” said chief executive John Donahoe.
“I’m pleased with our pace, our progress and our performance,” he added.
Donahoe has been moving eBay in the direction of fixed-price sales, as the online auction arena fills up with heavyweight competitors such as Amazon.
The company issued a forecast for the third quarter that was broadly in line with Wall Street’s expectation of a $0.35 a share profit, predicting that it would earn $0.34-$0.36.
Shares in the online auctioneer closed up 2.75 per cent at $19.45.