eBay today reported solid second quarter financial results that were slightly better than Wall Street's expectations but revenue growth of PayPal and Skype was offset, in part, by declines in the Marketplaces business.For the quarter ending June 30 (statement), the company reported net income of $479 million, or 37 cents per share, on revenue of $2.1 billion, down 4 percent from a year ago but ahead of Wall Street's expectations of 36 cents per share on revenue of $1.99 billion. In a statement, company president and CEO John Donahoe said:
We drove solid second quarter results, with strong momentum and market share gains at PayPal and continued stabilization in our core eBay business. We are managing our business with focus and discipline, delivering on our commitments while investing in our growth priorities. I’m pleased with our pace, our progress and our performance.
Looking ahead, the company forecast third quarter net revenue in the range of $2.050 billion to $2.150 billion with earnings per share of 34 cents to 36 cents. Here's eBay's closer-look chart for the current quarter:
Highlights from the quarter:
- The Payments business unit, which consists of PayPal and Bill Me Later, saw revenue grow 11 percent in the quarter, compared to a year ago. At the end of the quarter, there were 75.4 million active registered accounts, a 20 percent increase over last year.
- The Marketplaces business unit - which consists of eBay, Shopping.com, Kijiji and other e-commerce sites - saw revenue decline 14 percent from a year ago. The company blamed the drop on a stronger dollar and the sluggish global economy. Online classifieds revenue was up 19 percent
- The Communications business unit - aka Skype - saw revenue jump 25 percent from a year ago. At the end of the quarter, the business had more than 480 million registered users.
Marketplaces remains the weak link in the business and has been on the decline in recent quarters. But for the second quarter, revenue - while still weak - was actually up from the first quarter - a result of the work that the company is doing as part of a larger growth strategy.
During a call with analysts, Donahoe said the company is being managed with "discipline and focus" but noted that these tough economic times are "not times to be timid. Decisions we make today will determine leadership tomorrow." Specifically, the company is leveraging its cash flow to make smart investments in its core businesses.
Finally, execs said the company will make an announcement tomorrow about opening PayPal to third-party developers. Shares of eBay were up nearly 3 percent in regular trading Wednesday, closing at $19.45. In after-hours trading, shares initially tumbled but rebounded quickly and were on the rise.