EBay Inc forecast this year’s results above expectations after posting double-digit revenue growth in PayPal and its main online marketplaces unit, sending shares up 8 percent.
The company, which is in the midst of a turnaround as it battles Amazon.com and other retailers, also beat Wall Street profit estimates in its closely scrutinized holiday quarter.
EBay, which connects buyers and sellers over the Internet, has been overhauling its main marketplaces division to increase transactions on its site. Revenue rose 15 percent at that unit during the quarter.
Gross merchandise volume, which measures the total value of goods sold on eBay, rose 24 percent. That marked a huge improvement over the negative trends seen earlier last year.
EBay said it expects full-year adjusted earnings this year of US$1.63 to US$1.68 per share on revenue of US$8.8 billion to US$9.1 billion.
That was above the US$1.60 per share expected, on average, by Wall Street analysts.
“It’s fair to say a turnaround is taking shape,” said Morningstar analyst Larry Witt, calling the results the best in at least a year. “You’re going to see more of the same (in 2010).”
“Pay Pal is hitting the ball out of the park,” he added.
That fast-growing Web payments unit, which represents more than a third of overall revenue, saw a 28 percent revenue rise during the quarter.
“We are cautiously optimistic about slow, steady progress in the global economy,” said eBay chief executive John Donahoe on a conference call.
Fourth-quarter net profit was US$1.4 billion, or US$1.02 per share, up from US$367 million, or US$0.29 per share, a year earlier.
On an adjusted basis, profit was US$585.8 million, or US$0.44 per share — above analysts’ average forecast of US$0.40 per share, according to Thomson Reuters I/B/E/S. Revenue rose 16 percent to US$2.37 billion, also beating Wall Street expectations.
Revenue rose 11 percent in the US and 21 percent internationally.
EBay sold the bulk of its Skype Web telephone unit, deemed a bad fit with the company, for about US$1.9 billion in November to an investor group. EBay retains a 30 percent stake in Skype.
However, litigation expenses related to Skype, together with costs from the acquisition of South Korean e-commerce site GMarket, sent operating margins down. They fell to 7.6 percent in the quarter from 22.3 percent a year earlier. On an adjusted basis, margins fell to 29.3 percent from 32.8 percent.
Analysts have been looking for signs that measures taken by eBay to turn around its business are bearing fruit after years of sluggish growth. But some, including Benjamin Schachter, senior Internet analyst with Broadpoint Amtech, say the strength of any rebound is still too early to gauge.
Facing eBay this year is continued competition from Amazon.com and other retailers, and a consumer spending environment that is still under pressure.
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