eBay 'cautiously optimistic' heading into the holidays, but outlook disappoints

EBay's third quarter results weren't too shabby, but the company's outlook disappointed some on Wall Street. In addition, the company said it was "cautiously optimistic" heading into the holiday season.

EBay's third quarter results weren't too shabby, but the company's outlook disappointed some on Wall Street. In addition, the company said it was "cautiously optimistic" heading into the holiday season.

The company reported net income of $349.7 million, or 27 cents a share. Non-GAAP earnings were $501.5 million, or 38 cents a share, a penny better than Wall Street estimates. Revenue for the quarter ending Sept. 30 was $2.2 billion, up slightly from a year ago.

However, there were a few disappointing items in eBay's report. Operating margin fell to 19.8 percent in the quarter, down from 24.7 percent a year ago. The margin decline was largely attributed to eBay's Bill Me Later unit and a weaker U.S. dollar. Bill Me later had a net charge-off rate of 11.5 percent as bankruptcy and credit write-offs increased. The outlook was roughly on par with estimates. For the fourth quarter, eBay projected earnings of 28 cents a share to 30 cents a share. On a non-GAAP basis eBay projected earnings of 38 cents a share to 40 cents a share. Wall Street was expecting 40 cents a share. Revenue will be between $2.2 billion and $2.3 billion. The projections don't include the pending sale of Skype, which will give eBay a gain of about $1 billion.

By the charts:

Here's eBay's payment statistics:

And marketplace data:

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