EBay profit expands 18 per cent in fourth quarterVIVEK PRAKASH/Reuters
Online retailer eBay Inc. reported holiday quarter results that just beat Wall Street expectations, but the e-commerce company also gave a cautious forecast for 2013.
EBay shares climbed 1.7 per cent to $53.80 each in after-hours trading following the announcement.
Expectations were high ahead of the results because sales data from outside sources suggested strong sales growth from eBay's online marketplace and a solid increase in transactions processed by the company's PayPal payments business.
EBay's online marketplace, one of the largest in the world, has lagged behind the growth of e-commerce and Amazon.com Inc. for several years. But under chief executive officer John Donahoe, eBay has invested to improve the buying experience by upgrading search capabilities and prodding sellers to provide more services such as free shipping and easier returns.
The explosive growth of mobile shopping and popular mobile shopping applications have also attracted hundreds of thousands of new consumers to eBay's marketplace in the past year.
"These are great numbers," said Bill Smead of Smead Capital Management, which owns eBay shares. "The marketplace business used to be a noose around their neck, but now it's a key destination for people wanting to buy new goods as well as existing goods."
Amazon shares edged up less than 1 per cent to $269.31 in after-hours trading, close to a record. The world's largest Internet retailer is due to report fourth-quarter results on Jan. 29.
On Wednesday, eBay said fourth-quarter revenue jumped 18 per cent to $3.99-billion. Profit came in at $927-million, or 70 cents a share, in the period. That compares with profit of $789-million, or 60 cents a share, in the same quarter last year.
EBay was expected to earn 69 cents a share on revenue of $3.98-billion, according to Thomson Reuters I/B/E/S.
EBay forecast 2013 revenue of $16-billion to $16.5-billion and profit of $2.70 to $2.75 a share. Wall Street was calling for revenue of $16.3-billion and profit of $2.74 a share, according to Thomson Reuters I/B/E/S.