CONSUMER powerhouses eBay and Starbucks both reported a sharp rise in profits last night, indicating the economic recovery was gathering speed.
eBay saw first-quarter revenue rise 15.9 per cent to $2.5bn on the same period last year, fuelled by a 23 per cent revenue boost at PayPal and a 12 per cent increase at its online marketplaces, beating Wall Street forecasts of $2.48bn. Net income was $476m, or 36 cents per share, compared with $398m, or 30 per share, a year earlier.
Revenues at PayPal surged an astonishing 23 per cent to $992m, leading analysts to predict it will soon surpass the online marketplace as eBay’s main source of revenue. eBay passed a milestone in the first-quarter as the number of active PayPal accounts surpassed the number of active eBay accounts. There were 97.7m active PayPal users at the end of the quarter compared with 95.9m eBay users.
For all of 2011, eBay forecast adjusted earnings of $1.93 to $1.97 per share on revenues of $10.6bn to $10.9bn, above analyst forecasts of $10.48bn.
Coffee giant Starbucks also saw a sharp jump in profits in the three months to 3 April to $261.6m (£157.3m), up 20 per cent on the $217.3m the company made a year earlier.
Revenues rose 10 per cent to $2.8bn. Like-for-like sales, which strip out the impact of stores open less than a year, rose by seven per cent in the US in the first-quarter.
But Starbucks said rising commodity costs would have a bigger impact this year than previously forecast.
Nonetheless, Starbucks raised its profits guidance for the year to between $1.46 and $1.48 a share, compared with its January view for $1.44 to $1.47.
The company has recently undergone a restructuring programme designed to reduce costs, which involved concentrating on core markets and shutting hundreds of stores.