Online auctioneer eBay Inc. (EBAY: Quote), Wednesday said its second-quarter profit surged, helped mainly by a strong performance at its payments service business PayPal and e-commerce sites.
Earnings for the quarter came in ahead of analysts' estimates by a penny, while revenues also trumped Street expectations.
Moving ahead, eBay detailed its guidance for the third quarter that is expected to miss current street expectations. Nevertheless, the company backed its financial guidance for the full-year 2012. Shares of eBay rose about five percent on the news, in after-hours trade.
Chief Executive John Donahoe said, "We delivered a great second quarter, driven by eBay Marketplaces' best performance in years, strong growth at PayPal and strong same-store-sales growth for GSI's large retail customers."
eBay benefited from growing demand for online merchandise. Second-quarter revenues from Marketplaces unit, the biggest division, advanced 9 percent to $1.81 billion, helped mainly by "strong growth" across all regions. Gross merchandise volume, excluding vehicles, in the quarter increased 10 percent year over year.
Donahoe said Marketplaces division delivered its strongest "organic growth" in merchandise volume since 2006. Marketplaces division includes eBay, Shopping.com, StubHub, eBay Classifieds and other e-commerce sites.
Revenues from the company's Payments division, which includes online payment service PayPal and short-term credit service Bill Me Later, advanced 26 percent to $1.36 billion. Revenue growth reflects increased penetration on eBay as well as continued merchant and consumer adoption and strong growth in Bill Me Later.
PayPal ended the quarter with 113.2 million active registered accounts, a 12 percent increase. PayPal's net total payment volume grew 20 percent to $34.5 billion.
The GSI segment contributed net revenues of $221 million in the quarter. eBay completed the acquisition of GSI Commerce for nearly $2.4 billion in June last year.
eBay's net revenues for the second quarter grew 23 percent to $3.40 billion from $2.76 billion last year. Thirty-one analysts on a consensus estimated revenues of $3.36 billion for the quarter.
San Jose, California-based eBay's second-quarter net income surged to $692 million or $0.53 per share from $283 million or $0.22 per share last year.
The quarter's bottom line reflect a gain of $118 million related to the divestiture of a business, while last-year earnings recorded a one-time loss of $256 million from the divestiture of certain GSI businesses and GSI transaction-related costs.
Excluding one-time items, net income for the quarter rose to $730 million or $0.56 per share from $631 million or $0.48 per share last year. On average, 32 analysts polled by Thomson Reuters expected earnings of $0.55 per share for the quarter. Analysts' estimates typically exclude special items.
Looking forward to the third quarter, the company expects earnings in a range of $0.42 to $0.44 per share, adjusted earnings of $0.53 to $0.55 per share, and net revenues of $3.30 billion to $3.40 billion. Analysts currently expect earnings of $0.55 per share on revenues of $3.42 billion.
Despite providing a weak guidance for the third quarter, eBay continued to back its full-year 2012 outlook. The company continues to expects earnings in a range of $1.91 to $1.96 per share adjusted earnings of $2.30 to $2.35 per share, and revenues of $13.80 billion to $14.10 billion. Analysts currently expect earnings of $2.35 per share on revenues of $13.98 billion.
EBAY closed Monday's trading at $40.46, up $3.56%, on a volume of 18.6 million shares. The stock further gained $2.29 or 5.66% in after-hours trade.
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by RTT Staff Writer
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