EBay forecast 2010 results above expectations after posting double-digit revenue growth in PayPal and its main online marketplaces unit, sending shares up 8 per cent.
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 scrutinised 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 per cent. That marked a huge improvement over the negative trends seen earlier in 2009.
EBay said it expects full-year 2010 adjusted earnings of $1.63 to $1.68 per share on revenue of $8.8 billion to $9.1 billion. That was above the $1.60 per share expected, on average, by Wall Street analysts.
The company's fast-growing Web payments unit, which represents more than a third of overall revenue, saw a 28 per cent revenue rise during the quarter.
Gains in marketplaces, which includes Shopping.com, StubHub and other e-commerce units, were driven by more sold items and more goods purchased for fixed prices, rather than in an auction format.
The company has sought to increase selection, enhance security and make it easier to buyers and sellers to conduct transactions on the site. A lower tax rate and a stronger US dollar also helped results in 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 $1.4 billion, or $1.02 per share, up from $367 million, or 29 cents per share, a year earlier.
On an adjusted basis, profit was $585.8 million, or 44 cents per share. Revenue rose 16 per cent to $2.37 billion.
Revenue rose 11 per cent in the United States and 21 per cent internationally.
EBay sold the bulk of its Skype unit, deemed a bad fit with the company, for about $1.9 billion in November to an investor group. EBay retains a 30 per cent stake in Skype.
But litigation expenses related to Skype, together with costs from the acquisition of Korean e-commerce site GMarket, sent operating margins down. They fell to 7.6 per cent in the quarter from 22.3 per cent a year earlier. On an adjusted basis, margins fell to 29.3 per cent from 32.8 per cent.
Shares of eBay rose 69 per cent in 2009, buoyed by early signs of a turnaround in its marketplaces division, where growth has slowed in recent years. But they are off a year high of $25.80 in late October on concerns that a still-weak economy would weigh on growth.
Shares rose to $24.05 after closing on the Nasdaq at $22.23, down 4.4 per cent during the regular session.
Reuters