EBay has made headway in reviving the efficiency of its core auction business. The online auction site on Wednesday reported quarterly results that topped expectations and said its outlook for the rest of the year would be at the high end of analysts’ predictions.
EBay also disclosed on Wednesday that growth in its most mature markets, the US and Germany, had started to sag again, prompting Meg Whitman, chief executive, to promise a renewed focus on new products and features.
EBay’s performance came the day after Yahoo had disappointed Wall Street with news that it has made little headway in an overhaul of its own online advertising business. Yahoo’s shares slumped 12 per cent on Wednesday, wiping out nearly half of its gains in the run-up to its earnings announcement, while EBay’s stock climbed some 4 per cent in after-market trading.
Revenues in the first quarter rose 27 per cent to $1.77bn, EBay said, ahead of the $1.72bn Wall Street had expected. Net income increased 52 per cent to $377m, or 27 cents a share.
Excluding stock option costs and goodwill amortisation – the basis on which analysts judge the company – earnings reached 33 cents a share, ahead of the 30 cents most analysts had expected. However, the results benefited from a lower tax rate and the lower US dollar.
Ms Whitman called the performance “a very strong one for the company,” helped by a “solid” 23 per cent growth in the core market.
EBay admitted last year to a misstep that resulted in a flood of new listings to its sites, making it harder for visitors to find products to buy. The company has spent recent months reversing that move and focusing more on improving the buyer experience on its sites. That resulted in an increase in revenue generated for each listing to $2.13, from $1.77 a year ago.
The rate of listings growth slowed down more than most analysts had expected, to only 2 per cent year-on-year, reflecting the deceleration in the US and Germany. Growth in those markets was “not quite where we want [it] to be,” Ms Whitman said.
Among its newer businesses, revenues from Skype more than doubled to $77m, while revenues from advertising increased 65 per cent to $60m. PayPal’s revenues rose 31 per cent to $439m.