By Ben Fox Rubin
EBay Inc.'s (EBAY) fourth-quarter income shrank 62% as a large gain last year from the Internet retailer's sale of Skype masked continued growth in its payments and marketplace segments.
For the new year, the company expects adjusted earnings of $2.70 to $2.75 a share on revenue of $16 billion to $16.5 billion. Analysts polled by Thomson Reuters most recently predicted $2.74 a share and $16.3 billion, respectively. For the first quarter, eBay expects adjusted earnings of 60 cents to 62 cents a share and revenue of $3.65 billion to $3.75 billion, below estimates of 63 cents and $3.8 billion.
EBay has also been able to rely on its fast-growing PayPal payment unit, which has been at the core of the company's broader effort to insert itself as a useful tool for other retailers, rather than as a rival to those firms.
The unit has expanded from an online payment service to a payment tool on mobile devices and at brick-and-mortar stores. But amid that strong growth, the company in October said it sought to reshape PayPal into "a single, more agile organization," as it unveiled plans to cut 2.5% of the unit's staff, or 325 jobs, and said PayPal would cut ties with about 120 contractors around the world.
The marketplaces segment--eBay's largest division--posted 16% higher revenue at $2.05 billion. Gross merchandise volume, which is the total value of goods sold on the website, grew 16%, excluding vehicle sales.
The payments segment, which includes PayPal and is on track to become eBay's largest business, saw revenue rise 24% to $1.54 billion.
Overall, eBay reported a profit of $751 million, or 57 cents a share, down from $1.98 billion, or $1.51 a share, a year earlier. The year-ago period included about $1.66 billion from the company's sale of Skype. Additionally, the company posted $31 million in restructuring charges in the latest quarter. Excluding gains from the Skype sale, stock-based compensation and other items, per-share earnings rose to 70 cents from 60 cents.
Net revenue improved 18% to $3.99 billion.
EBay in October forecast a per-share adjusted profit between 66 cents and 69 cents and $3.85 billion to $4 billion in revenue.
Gross margin was flat at 69.4%.
Shares closed Wednesday at $52.90 and were up 0.5% after hours. As of the close, the stock was up 9.7% over the past three months, as it has enjoyed a relatively consistent march upwards since early 2009.
Write to Ben Fox Rubin at [email protected]
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