EBay last night reported lower quarterly net profit, sales and margins, but results beat Wall Street expectations and shares of the online auctioneer rose nearly 6 per cent.
Ebay, in the midst of attempting a multiyear turnaround, also unveiled a second-quarter earnings outlook that matched expectations.
A stronger US dollar hurt eBay's sales and profitability, and eBay's marketplaces business, its largest unit, saw an 18 per cent revenue decline in the first quarter.
“The positive news is we've been accustomed to being disappointed,” said Ryan Jacob, portfolio manager at Jacob Internet Fund, which has a position in eBay.
“In this case, they did exceed the numbers a bit and the guidance was in line so that alone is probably cause for some relief.”
But he added: “The core problems are still there.”
The company, which announced last week a plan to spin off its Skype Web telephone business, said first-quarter net profit was $357 million, or 28 cents per share, down from $460 million, or 34 cents per share, a year earlier.
Excluding one-time items, earnings per share were 39 cents, exceeding the 34 cents per share expected, on average, by analysts, according to Reuters Estimates.
Revenue slid 8 per cent to $2.02 billion, the company said, still above the $1.95 billion expected, on average, by analysts - impacted by the effects of a stronger dollar and the difficult global economy. Some 54 per cent of eBay's sales come from its international businesses.
At PayPal, the company's web payment service, revenue rose 11 per cent. They rose 21 per cent at Skype.
But operating profit margins fell to 20.9 per cent in the quarter from 25.2 per cent a year ago, due to a stronger US currency and a shift to lower-margin businesses, eBay said.
Gross merchandise volume excluding vehicle sales - which measures the total value of goods sold on eBay - fell 16 per cent.
EBay said it expects second-quarter adjusted earnings per share of 34 cents to 36 cents on revenue of $1.85 billion to $2.05 billion.
Reuters