eBay beats the street as sales jump upwards

City A.M. Reporter
EBAY yesterday reported quarterly results that just beat Wall Street expectations, but the e-commerce giant also gave a cautious forecast for the year ahead.

Fourth-quarter revenue jumped 18 per cent to $3.99bn (£2.49bn). Profit came in at $927m, or 70 cents a share in the period.

That compares with profit of $789m, or 60 cents a share, in the same quarter last year.

EBay was expected to earn 69 cents a share on revenue of $3.98bn.

Shares in the company climbed 1.7 per cent to $53.80 last night following the announcement.

“These are great numbers,” Bill Smead of Smead Capital Management, which owns eBay shares, said.

“The marketplace business used to be a noose around their neck, but now it’s a key destination for people wanting to buy new goods as well as existing goods.”

EBay forecast 2013 revenue of $16bn to $16.5bn and profit of $2.70 to $2.75 a share.

Expectations were high ahead of the results because sales data from outside sources suggested strong sales growth from eBay’s online marketplace and a solid increase in transactions processed by the company’s PayPal payments business.

EBay’s online marketplace, one of the largest in the world, has lagged behind the growth of e-commerce and rival Amazon for several years.

But under chief executive John Donahoe (pictured below), eBay has invested to improve the buying experience by upgrading search capabilities and prodding sellers to provide more services such as free shipping and easier returns.

The explosive growth of mobile shopping and popular mobile shopping applications have also attracted hundreds of thousands of new consumers to eBay’s marketplace in the past year.