eBay Q3 income - Now with profit
Full-year guidance lowered
Internet auctioneer eBay has reversed a loss from its third quarter last year, but warned that its full-year revenues would fall short of previous estimates.
Net income during eBay's third quarter ending September 30 was $492.2m – a marked improvement over a year-ago loss of $935.6m. The auction site's Q3 2007 finances had been badly damaged by a $1.4bn charge relating to its purchase of Skype.
eBay's net revenue was $2.12bn, up $228m from the same period last year.
The company's core auction business generated $1.38bn in revenue, a 4 per cent rise year-over-year. Gross merchandise volume totaled $14.28bn for the quarter. About 53 per cent of revenue in this segment was generated outside the US.
PayPal ops had net revenue of $597m, a 27 per cent increase over the same period last year. Registered accounts increased 19 per cent year-over-year to 65 million.
The Skype department reported $143m in revenue for the quarter, representing a 46 per cent increase over Q3 2007. eBay said it ended the quarter with more than 370 million registered users around the world.
"Overall, we are pleased with the performance of the portfolio this past quarter," said eBay CEO John Donahoe. "We took a number of steps during the quarter to further strengthen our business and better align our cost structure to invest and compete."
Said alignment came in the form of auction fee changes to encourage more fixed-price sales instead of auctions. The company has struggled as of late to retain buyers and sellers migrating to bidding-free sites like Amazon.
This month, eBay said it would lay off 1,000 employees and remove hundreds of temporary positions. On the other hand, it also announced it has paid $945m for the online credit firm, Bill Me Later, and $380 cash for two Danish classified companies.
As a result of restructuring, eBay said it expects to be hit with about $70m to 80m in charges in the fourth quarter. Net revenues for that quarter are expected to be in the range of $2bn to $2.17bn.
For the full year, eBay lowered its earnings forecast (that it had raised in July). The company now expects revenues between $8.53bn and $8.66bn. Previous estimates were between $8.7bn and $9.05bn. ®