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Ebay Profit Tops Estimate; Outlook Weak

Ebay Profit Tops Estimate; Outlook Weak
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E-commerce giant eBay Inc. (EBAY: Quote) said Wednesday after the markets closed that its first quarter profit rose 19% from last year, helped by continued strong growth in its PayPal and Marketplaces businesses.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.

At the same time, the company forecast second quarter revenue and earnings below analysts' current consensus estimates.

"We had a strong first quarter, with accelerating user growth across both Marketplaces and PayPal, and with GSI enabling their retail clients to grow faster than ecommerce," said John Donahoe, eBay Inc. President and CEO.

eBay shares are currently losing 2.64% in after hours trading after closing the day's regular trading session at $56.10, down 91 cents or 1.60%. The shares trade in a 52-week range of $35.50 to $58.04.

eBay said it gained about 2.8 million new customers in the first quarter through mobile, driving double-digit growth in active users at both PayPal and Marketplaces.

First quarter net revenues from the company's Marketplaces business, which consists of eBay, Shopping.com, StubHub, eBay Classifieds and other e-commerce sites, rose 13% to $2.0 billion, driven by strong performance in the United States.

Gross merchandise volume excluding vehicles in the fourth quarter increased 13% year over year to $18 billion.

Marketplaces gained 3.9 million active users in the first quarter and ended the quarter with 116 million, a 13% increase.

Revenue from the company's PayPal business increased 18% to $1.5 billion in the first quarter. PayPal gained 5 million active registered accounts in the period and ended the quarter with 128 million, a 16% increase over last year.

PayPal's net total payment volume, or TPV, jumped 21% to $41 billion in the first quarter, driven by consumer and merchant use of PayPal both on and off eBay.

The company's GSI Commerce business generated revenue of $236 million in the first quarter, down slightly from $237 million in the first quarter of last year.

For the first quarter ended March 31, 2013, eBay reported net income of $677 million or $0.51 per share, compared to $570 million or $0.44 per share for the year-ago quarter.

Excluding items, adjusted net income for the first quarter was $829 million or $0.63 per share, compared to $725 million or $0.55 per share in the prior year quarter.

On average, 36 analysts polled by Thomson Reuters expected the company to earn $0.62 per share for the first quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter improved to 21.3% from 19.9% a year ago, while adjusted operating margin increased to 27.4% from 26.9% last year.

Net revenue for the first quarter rose 14% to $3.75 billion from $3.28 billion in the same quarter last year. Thirty-five analysts had a consensus revenue estimate of $3.77 billion for the first quarter.

For the first quarter, eBay's U.S. revenues grew 13% to $1.79 billion, while International revenues rose 16% to $1.96 billion.

The company said it repurchased about $476 million of its common stock during the first quarter.

Looking forward to the second quarter, the company forecast net revenues of $3.80 billion to $3.90 billion, earnings of $0.46 to $0.48 per share and adjusted earnings of $0.61 to $0.63 per share. Analysts currently expect the company to earn $0.66 per share on revenue of $3.95 billion for the second quarter.

For the full year 2013, the company said it continues to expect net revenues of $16.00 billion to $16.50 billion, earnings $2.23 to $2.29 per share and adjusted earnings of $2.70 to $2.75 per share. Analysts currently expect the company to earn $2.75 per share on revenue of $16.38 billion for the full year 2013.

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by RTT Staff Writer

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