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Earnings Roundup

Ebay

Profit slides 29%; PayPal raises sales

October 22, 2009|Times Wire Reports

EBay Inc. said third-quarter net income fell 29%, but its revenue rose largely because more people and merchants are using PayPal to pay for things online.

The San Jose company said the number of active PayPal accounts rose 19% to 78 million compared with a year earlier. That contributed to a 15% revenue jump to $688.1 million in its payments business -- which includes PayPal and short-term credit service Bill Me Later.

But EBay's core marketplace business, which includes the main EBay site and other sites such as Shopping.com, saw revenue slide 1% to $1.4 billion.

Although the company attributed this decline partly to unfavorable foreign exchange differences, the decline in marketplaces may indicate that efforts to revitalize EBay's main site still haven't gained enough traction among bargain-hungry shoppers, or that shoppers have simply continued to rein in their spending because of the still-weak economy.

The online marketplace operator's third-quarter net income fell partly because operating expenses climbed. EBay earned $350 million, or 27 cents a share, compared with a profit of $492 million, or 38 cents, a year earlier. Revenue increased 6% to $2.24 billion.

Shares of EBay, which also forecast third-quarter results in line with analyst estimates, fell $1.31, or 5.2%, in after-hours trading. The shares ended regular trading down 3 cents at $25.03.

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