PayPal boosts profit at eBay

Steve Dinneen
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EBAY outperformed expectations in its final quarter, with net profits soaring to $1.4bn, or $1.02 a share.

More than $20bn (£12.3bn) was processed in the quarter – the first time the mark has been surpassed.

The auction site smashed the previous year profits of $367m, or 29 cents per share. On an adjusted basis, profit was $585.8m, or 44 cents per share. Revenue rose 16 per cent to $2.37bn.
Both were above analysts’ expectations, with predictions coming in around the 40 cents per share mark.

The results were buoyed by growth in its online transactions unit PayPal, with revenue up 28 per cent to $795.6m. Revenue from the marketplace was up 15 per cent to $1.5bn.
eBay reported a massive one-time gain of $1.4bn from the sale of internet phone service Skype to a consortium of private investors.

In 2010 eBay is looking for earnings per share of $1.63 to $1.68, above analyst estimates of $1.60.

In after hours trading, shares rose 2.1 per cent to $22.70 after closing on the Nasdaq at $22.23, down 4.4 per cent during the day.

eBay president John Donahoe said: “We delivered a strong fourth quarter with double-digit revenue growth driven by exceptional performance at PayPal and turnaround progress and momentum in our eBay business.”

The growth is welcome news to eBay shareholders, who have seen the firm consistently outperformed by online retail giant Amazon.