(This story and related background material will be available on The Wall Street Journal website, WSJ.com.)
By Stu Woo
Of THE WALL STREET JOURNAL
EBay Inc. (>> eBay Inc), in a sign that it is sustaining a turnaround, on Wednesday posted a 20% profit jump and a 29% revenue increase for its first quarter and upgraded its full-year earnings forecast.
The better-than-expected results affirmed Chief Executive John Donahoe's plan to revive the onetime Internet-retailing pioneer, which was in danger of becoming a dot-com has-been before sparking a comeback about a year ago.
While eBay's revenue-growth rate still trails that of rival Amazon.com Inc. (>> Amazon.com, Inc.), which reports its first-quarter earnings next week, the San Jose, Calif., company's double-digit sales increases are an improvement over the quarterly losses that came as recently as 2009.
Donahoe became eBay CEO in 2008 and at the time said he planned for a three-year turnaround. Since then, eBay has worked to remove clutter from its website, improve its search engine and promote fixed-price sales and free-shipping offers.
EBay's results over the first quarter were driven by healthy performances across its portfolio of businesses, which includes its online marketplace as well as the electronic-payments company PayPal. PayPal's revenue grew 32% from a year earlier to $1.3 billion, while revenue for the online marketplace rose 11% to $1.7 billion.
"What stuck out to me was not any one segment, but the fact that each of the business segments appears to be very healthy," said Colin Sebastian, an analyst with Robert W. Baird & Co.
The results sent eBay shares, which closed the day at $35.87, up 7.36% to $38.51 in after-hours trading.
In a conference call, Mr. Donahoe said, "We had a strong first quarter and an excellent start to the year."
The results follow a key executive departure in January, when PayPal president Scott Thompson left to become Yahoo Inc.'s (YHOO) CEO. PayPal last month promoted executive David Marcus to lead the business. Long the undisputed leader in processing online payments, PayPal this year plans to foray into processing payments at bricks-and-mortar stores, an ambitious endeavor that competitors such as Google Inc. (GOOG) are also undertaking.
EBay also raised its full-year outlook to $13.8 billion to $14.1 billion in sales and earnings of $1.91 to $1.96 per share. That was above its previous forecast, issued in January, of $13.7 billion to $14 billion in revenue and earnings of $1.76 and $1.81 per share.
In total, eBay said its net income for the first quarter totaled $570 million, or 44 cents a diluted share, up from $476 million, or 36 cents a diluted share, a year ago. Revenue was $3.27 billion, up from $2.55 billion a year earlier.
-By Stu Woo, The Wall Street Journal, [email protected]