eBay starts off year with strong first quarter earnings

Summary:eBay reported its earnings for the first quarter, and with a 16% increase in revenue, the online auction giant exceeded Wall Street expectations.

eBay reported its earnings for the first quarter of 2011 on Wednesday, and with a 16% increase in revenue, the online auction giant exceeded Wall Street expectations.

eBay reported first quarter earnings of $475.9 million, or 36 cents a share. Non-GAAP earnings were 47 cents a share on a revenue of $2.55 billion. eBay was expected to report first quarter earnings of 46 cents a share on revenue of $2.48 billion.

PayPal certainly helped out with matters as active registered accounts grew by 16 percent year-over-year as it expanded "its leadership position in global payments." eBay Inc. President and CEO John Donahoe said in a statement:

In the first quarter, PayPal continued to drive strong growth globally, eBay sharply accelerated growth in the U.S. and we announced several acquisitions that we believe will enhance our leadership and innovation in commerce and payments. The year is off to a strong start.

Key points:

  • Mobile payments via Mobile Express Checkout and PayPal Send Money apps are helping drive growth
  • Marketplaces business delivering "improved performance" and is also focusing more on mobile technology

By the numbers:

  • GAAP operating margin remained flat at 22.2% both for the first quarter of 2011 and for the same period last year
  • Repurchased approximately $356.2 million of its common stock in Q1
  • eBay generated $699.6 million of operating cash flow and $551.0 million of free cash flow in Q1
  • Cash and cash equivalents and non-equity investments portfolio totaled $8.1 billion at March 31, 2011, compared to $7.8 billion at December 31, 2010

For the second quarter, eBay expects net revenues in the range of $2.55 to $2.65 billion with earnings per share in the range of $0.36 to $0.37, and non-GAAP earnings per share in the range of 45 cents a share to 46 cents a share. Wall Street is looking for second quarter earnings of 46 cents a share on revenue of $2.51 billion.

For 2011, eBay predicts net revenues ranging from $10.6 to $10.9 billion with earnings per share in the range of $1.53 to $1.58, and non-GAAP earnings per share ranging between $1.93 to $1.97.

Related coverage on ZDNet:

Topics: Banking, E-Commerce

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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