EBay Inc. posted a 13-per-cent rise in quarterly revenue, as better-than-expected results from its fast-growing PayPal division helped to overcome increasing competition from Amazon.com Inc and a well-publicized cyberattack that exposed customers’ data.
Investors had braced for a tough quarter.
Ebay’s stock has fallen more than 8 per cent since April, hurt by a cyberattack disclosed in May that compromised data for some 145 million customers; the departure of the highly regarded chief of PayPal; and intensifying competition from both online and offline rivals.
Some analysts said a change in Google Inc.’s algorithm in the quarter may also have pushed eBay results lower in search rankings, leading to slower traffic.
Several investment brokerages downgraded their forecasts for eBay ahead of Wednesday’s results. The online commerce company reported results and offered a revenue outlook that fell roughly in line with those tempered expectations.
It reported second-quarter revenue of $4.37-billion (U.S.), versus $3.88-billion a year ago and the $4.38-billion that Wall Street had expected, on average.
Total payment volume leaped a better-than-expected 29 per cent in the period. Gross merchandise value, a measure of ecommerce transactions across its main Marketplaces platform, grew 12 per cent, in line with or slightly better than analysts’ forecasts.
Shares in eBay inched 1.3 per cent higher to $51.35 after hours, from a close at $50.70 on the Nasdaq.
“We had a challenging quarter with several distractions,” eBay said in an online investor presentation that accompanied its results.
Beyond the present, eBay will have to grapple with increasing competition across its businesses.
PayPal Chief Executive David Marcus departed for Facebook’s messaging team in June. The payments service, which has 148 million active users, faces a growing challenge from the likes of Amazon, which launched a recurring payments program in June. Google is expected to delve further into this field.Physical retailers are investing to boost their online presence. EBay also has to fend off a growing coterie of fast-growing retail upstarts that focus on specific categories such as home and apparel.
Longer term, industry analysts speculate that Chinese e-commerce giant Alibaba Group Holdings Ltd, which is going public this year in what could be the largest-ever tech IPO, is preparing to leverage its U.S. investments into a play for the world’s largest retail arena.
On Wednesday, eBay forecast third-quarter revenue of $4.3-billion to $4.4-billion, compared with expectations for $4.4-billion according to Thomson Reuters I/B/E/S.
For the second quarter, it posted non-GAAP earnings per share of 69 cents, a penny better than the average Street forecast for 68 cents.
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