Earnings: EBay Swings To Black For Q3 But Growth Is Oh So Slow
This story was written by Staci D. Kramer.
EBay moved into the black for Q3 but will it be there this time next year? The e-commerce company reported third-quarter net income of $492 million after charges, or $0.38 per share, up from a loss of $.69 in the same quarter last year. (Q307 included the massive $1.43 billion writedown for Skype.) Revenue rose $228 million to $2.12 billion, up 12 percent over $1.9 billion in Q307. But the economic downturn combined with eBay's (NSDQ: EBAY) slowing growthalmost stagnantdoesn't bode well; that year-over-year revenue increase is actually down $769 million from last quarter and eBay's increases for the last three quarters were incremental, with a range of $15 million. Q4 will include $70-80 million in charges from the recently announced 10 percent job cuts. The result: eBay would consider zero revenue growth over this quarter to be a win.
Skype: Revenue for eBay's communications division grew 46 percent over last year, to $143 million. A "robust trajectory" as eBay puts it but again, revenue growth is slowing. Sequentially, Skype revenue was $126 million in Q1, $136 million in Q2.
MKTW: " Earlier this year, eBay began a restructuring effort designed to improve the buying and selling experience on its Web site. This included changes to clean up older listings and offer more items on a fixed-price basis, which has become a popular draw for competitors such as *Amazon*.com. But so far, the changes do not seem to have boosted the core business. The company said gross merchandise volumethe value of all goods sold over its auctions Web siteslipped by 1% during the quarter. GMV had grown by 14% in the previous third quarter."
Earnings release | Webcast | Slides
By Staci D. Kramer