MARKETS
eBay sees revenue jump, raises outlook
17-04-2008
by Deirdre McArdle
Online marketplace eBay saw sales jump 24 percent for the first quarter of 2008, while the firm raised its outlook for the coming quarter.
Revenue for the quarter ended 31 March 2008 came in at USD2.19 billion, up USD424 million on the same period last year. The figures surprised Wall Street, which had been predicting revenue of USD2.08 billion for the quarter.
Growth was primarily driven by eBay's Marketplaces division, as well as expansion at PayPal and Skype, the firm said. Marketplaces, which consists of eBay.com, Shopping.com and the firm's other e-commerce sites, posted revenue of USD1.48 billion for the quarter, up 19 percent on the prior year. PaylPal also had a strong quarter, recording revenue of USD582 million, up 32 percent on Q1 2007, while Skype saw revenue jump 61 percent year-on-year to USD126 million.
Net income for the quarter amounted to USD460 million, or USD0.34 per share, a rise of 22 percent on the USD377 million, or USD0.27 per share, recorded for the first quarter of 2007.
"This was a very strong financial quarter for the company," said eBay president and CEO John Donahoe, who took over the reins of the company from Meg Whitman on 31 March 2008. "The results reflect the strength provided by our diverse portfolio of businesses. Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come."
So pleased was eBay with its results it revised its outlook upwards for the coming quarter and the full year. It now expects second quarter revenues in the range of USD2.1 billion to USD2.15 billion; analysts had predicted revenue of USD2.11 billion. For the year, eBay expects revenues of USD8.7 billion to USD9 billion; analysts had estimated USD8.79 billion.
eBay has made a few changes to its service over the past few months, such as discontinuing live auctions and disallowing negative feedback about buyers, a move that drew some ire from the seller community. The online marketplace also re-structured its fees for sellers and introduced a default search order based on relevance and seller quality as part of an overhaul of its business model.
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