EBay Beats Street, But Q3 Looks a Bit Light

It was another good quarter for eBay (EBAY), which beat Street expectations at both the top line and the bottom line. The company also upped its full year guidance, while offering an outlook for Q3 that is a little short of what the Street had expected.

For the second quarter, eBay posted revenue of $2.2 billion and non-GAAP EPS of 43 cents a share, ahead of the Street at $2.17 billion and 41 cents. The company beat its own guidance of revenue of $2.1 billion to $2.15 billion, with non-GAAP EPS of 39-41 cents.

For Q3, the company sees revenue of $2.1 billion to $2.15 billion, with EPS of 30-32 cents GAAP, 39-41 cents non-GAAP. The Street has been expecting slightly higher revs of $2.18 billion, with non-GAAP profits of 41 cents, or a penny above the current middle of the range.

For all of 2008, eBay increased its revenue guidance to a range of $8.8 billion to $9.05 billion, up from $8.7 billion to $9 billion. Its non-GAAP profit forecast inches up to $1.72-$1.77, from $1.70-$1.75.

In a statement, CEO John Donahoe said it was “a strong quarter,” driven in particular by growth at PayPal.

GAAP operating margin in the quarter was 24.8%, down from 24.9% a year ago; non-GAAP operating margin was 31.9%, down from 32.4%. Pressuring margins: faster growth of lower-margin segments, including PayPal and Skype.

In the quarter, eBay bought back 19 million shares, for about $566 million. The company finished the quarter with $4.9 billion in cash and short-term investments.

The eBay Marketplaces business generated $1.46 billion in revenue, up 13% year over year, but down 2% sequentially. Gross merchandise volume was $15.68 billion, up 8% year over year, but down 2% sequentially. Non-U.S. revenue was 56% of the total for Marketplaces. Active users were 84.5 million, up 1% from the March quarter. New listings totaled 666.9 million, up 19% year over year and 3% sequentially.

Overall revenues were lifted $121 million from foreign currency factors, the company said. U.S. net revenues were up 12% year over year, but off 2% sequentially, while international net revenues were up 27% year over year, and up 2% sequentially.

PayPal revenues were $602 million, up 33% year over year and 3% sequentially. Net total payment volume was $14.93 billion, up 35%. Global accounts rose 19% to 62.6 million.

Skype revenues were $136 million, up 51% year over year and 8% sequentially. The company added 29 million registered users, to 338.2 million.

In today’s regular session, EBAY rose $1.34, or 5%, to $28.23.

Comments

[PastTense:]

"New listings totaled 666.9 million, up 19% year over year and 3% sequentially"

Don't pay any attention to new listings numbers. eBay is now doing deals with companies such as Buy.com, where there are no listing fees--just commissions. So if you look at an area like books you will find that a large percentage (40%?) are from buy.com, who isn't paying listing fees.

2008 Jul 16 09:04 PM

[John Pseudonym:]

July 16th, 2008

1 in 33 listings on eBay is Buy.com under the user ID Buy.

They list for free with a final value fee of 1.5%

2008 Jul 17 01:11 AM