EBay Inc, the most-visited US e-commerce site, reported sales and profit that beat estimates, a sign that efforts to overhaul its auction and fixed-price retail site are working. The shares rose 5.4 per cent.
Net income was $357.1 million, or 28 cents a share, the San Jose, California-based company said today in a statement. Excluding some items, earnings were 39 cents a share, beating the 34-cent estimate by analysts in a Bloomberg survey.
EBay’s profit and sales forecast for the second quarter met analysts’ estimates. CEO John Donahoe is pushing EBay toward offering more out-of-season and liquidation items to counter a slowdown in online shopping. He’s also aiming to make EBay easier to use for buyers and sellers, upgrading the search engine and offering buyer guarantees.
“This earnings came as a positive surprise to us,” said Sandeep Aggarwal, an analyst at Collins Stewart LLC in San Francisco. “Their businesses did better than we expected.”
Sales in the period were $2.02 billion, topping the $1.94 billion predicted by analysts. Last year, profit was $459.7 million, or 34 cents a share.
EBay rose 80 cents to $15.58 in late trading after closing at $14.78 on the Nasdaq Stock Market. The shares have gained 5.9 per cent this year.
Sales in the second quarter will be as much as $2.05 billion and earnings will be as much as 36 cents a share, EBay said. Analysts had estimated sales of $1.98 billion and earnings of 35 cents a share.
Online Sales
Online sales in the US will grow 11 per cent this year to $156.1 billion, down from 13 per cent growth last year, according to Forrester Research Inc in Cambridge, Massachusetts.
Donahoe overhauled listing fees last year and encouraged sellers to offer more fixed-price items. Fixed-price sales rose 12 per cent in the quarter, while auction sales declined 20 per cent. Fixed-price sales may account for as much as 70 per cent of the site’s sales within a few years, up from about half today, Donahoe said in an interview.
“What we did last year was we leveled the playing field between fixed-price and auction so that buyers and sellers can buy and sell in the format of their choice,” Donahoe said.
Gross merchandise volume, the value of all goods that users sold on EBay’s sites, excluding vehicles, fell 16 per cent to $10.8 billion.
