Skype, PayPal Lead eBay to Q3 Profitability
eBay posted revenue of $2.12 billion - a 12% increase and $228 million more than the same period last year - but not because of its online auction business, according to the Q3 earnings report (pdf).
Net income was $492 million, or 38 cents a share, a vast improvement over last year’s third-quarter $936 million loss (-69 cents a share), caused by a $1.4 billion charge from to the write-off of goodwill from the 2005 acquisition of Skype.
Marketplace transaction revenue still constitutes a majority of eBay’s revenue. Over the past year, it has changed its website - cleaning up older listings and offering more items on a fixed-price basis - but so far the changes have not boosted its core business, writes MarketWatch.
In fact, gross merchandise volume, or the value of all goods sold over its auctions website, fell 1% in Q3, compared with a 14% increase in 3Q07.
eBay’s growth rates were helped by PayPal, which jumped 27% to $597 million, and Skype, revenues from which grew 46% from the same period last year to $143 million.
eBay’s global footprint also gave it strength in other currencies relative to the US dollar.
The company’s fourth-quarter forecast, however, foresees a potential drop in overall revenue of about 7% from the previous year.
eBay is facing a “tough consumer spending environment” and will likely have to spend more on sales and marketing efforts, said CFO Bob Swan.