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Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Apr 18 2012 16:24:45

eBay Releases First Quarter 2012 Earnings

By: Ina Steiner
Sponsored Link
eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing first quarter 2012 earnings, you can view the full release with tables on the eBay investor website.

eBay Inc. Reports Strong First Quarter 2012 Results

Revenue and Net Income up Double Digits Year Over Year as PayPal and Marketplaces Momentum Continues

SAN JOSE, Calif.--(BUSINESS WIRE)--Global commerce platform and payments leader eBay Inc. (NASDAQ:EBAY) today reported that revenue for the first quarter ended March 31, 2012, increased 29% to $3.3 billion, compared to the same period of 2011. The company reported first quarter net income on a GAAP basis of $570 million, or $0.44 per diluted share, and non-GAAP net income of $725 million, or $0.55 per diluted share. The year-over-year increase in first quarter GAAP and non-GAAP earnings per diluted share was driven primarily by strong top-line growth, partially offset by increased investment in the shopping experience and the impact of acquisitions.

"The first quarter was a strong start to the year for us with momentum continuing in our Marketplaces, PayPal and GSI Commerce businesses," said eBay Inc. President and CEO John Donahoe. "We believe that innovation in retail today is technology driven, and consumers are embracing smarter, easier, better ways to shop. We are enabling commerce in this new retail environment, supporting and partnering with sellers of all sizes and giving consumers worldwide the ability to shop anytime, anywhere, for whatever they want."

The company's PayPal business delivered strong first quarter performance. PayPal ended the quarter with 109.8 million active registered accounts, a 12% increase over the first quarter of 2011. PayPal revenue increased 32% year over year, driven primarily by increased penetration on eBay as well as continued merchant and consumer adoption. PayPal's net total payment volume (TPV) grew 24% year over year to $34 billion. PayPal continues to invest in innovation, focusing on its core platform as well as mobile and point of sale initiatives. PayPal expects to process $7 billion in mobile TPV in 2012. PayPal launched an expansion of its payment services to offline merchants in the first quarter. The Home Depot has launched PayPal payments in all of its nearly 2,000 U.S. stores, giving shoppers the opportunity to pay using just their mobile phone number or PayPal payment card and PIN. Users can switch between paying with their phone or payment card at any time. The company also launched PayPal Here in the U.S., Australia, Canada and Hong Kong. With PayPal Here, small businesses can now process almost any form of payment online or offline, including credit and debit cards, checks and PayPal using only a smartphone.

The company's Marketplaces business also delivered strong first quarter performance. Gross merchandise volume (GMV) excluding vehicles increased 12% year over year to $16 billion. Sold items increased 17% compared to the first quarter of 2011, reflecting the continued impact of improvements to eBay's core technology that are designed to make it easier and faster for shoppers to browse and buy. U.S. GMV excluding vehicles increased 13% year over year as sold items growth, mobile engagement and momentum in fashion and parts & accessories were key drivers of growth in the first quarter. Fixed price GMV, which represented 64% of total GMV in the first quarter, grew 18% globally year over year, a four-point acceleration compared to the fourth quarter of 2011. International GMV excluding vehicles increased 11% year over year to $10 billion, reflecting improved performance in Korea and solid growth in Europe. Downloads of eBay's suite of mobile apps surpassed 12 million in the first quarter and 78 million globally since the launch of mobile in the third quarter of 2008. eBay expects to generate $8 billion in mobile volume transacted in 2012.

The company's GSI business, which was acquired in the second quarter of 2011, contributed $237 million in revenue for the first quarter. GSI generated $715 million in global ecommerce (GeC) merchandise sales during the quarter. Same store sales grew 26% year over year, reflecting strong ecommerce sales from retail clients.

First Quarter 2012 Financial Highlights
(presented in millions, except per share data and percentages)




Other Selected Financial Results
    Operating margin — GAAP operating margin decreased to 19.9% for the first quarter of 2012, compared to 22.2% for the same period last year. Non-GAAP operating margin decreased to 26.9% for the quarter, compared to 29.4% for the same period last year. The decrease in GAAP and non-GAAP operating margin was due primarily to the impact of acquisitions and business mix.
    Taxes — The GAAP effective tax rate for the first quarter of 2012 was 17%, compared to 16% for the first quarter of 2011. For the first quarter of 2012 and 2011, the non-GAAP effective tax rate was 20% and 19%, respectively.
    Cash flow — The company generated $531 million of operating cash flow and $289 million of free cash flow during the first quarter, which were negatively impacted by a one-time tax payment of approximately $300 million related to the gain on the sale of our remaining equity interest in Skype in fourth quarter 2011.
    Stock repurchase program — The company repurchased approximately $240 million of its common stock in the first quarter.
    Cash and cash equivalents and non-equity investments — The company's cash and cash equivalents and non-equity investments portfolio totaled $7.8 billion at March 31, 2012 up from $7.5 billion at December 31, 2011.

Business Outlook
    Second quarter 2012 — eBay expects net revenues in the range of $3,250 - $3,350 million with GAAP earnings per diluted share in the range of $0.49 - $0.51 and non-GAAP earnings per diluted share in the range of $0.53 - $0.55.
    Full year 2012 — eBay now expects net revenues in the range of $13,800 - $14,100 million with GAAP earnings per diluted share in the range of $1.91 - $1.96 and non-GAAP earnings per diluted share in the range of $2.30 - $2.35.

Quarterly Conference Call
eBay will host a conference call to discuss first quarter 2012 results at 2:00 p.m. Pacific Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, can be accessed through the company's Investor Relations website at http://investor.ebayinc.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

See Thursday's Newsflash article, "eBay Releases Q1 Earnings, CEO Says Lots of Change Ahead."

Reading EcommerceBytes Blog: eBay Releases First Quarter 2012 Earnings
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Readers Comments

Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Anonymous Annie
       
Wed Apr 18 16:54:08 2012
As Lucille Ball might say: ''Yeeuuughhh''

All those numbers make me dizzy. My eyes glaze over and everything looks blurry. It's hard to tell what's real, and what's spin?

So what's the bottom line for eBay? Are eBay *sales* up 17%? If so, which sellers are doing so well? Who's carrying-the-water for eBay? Why doesn't eBay get a little more granular with their reporting?

My eBay sales are down... noticeably down. But, according to my records, I'm paying MORE to the eBay/PP machine than ever before.

With all these ''free'' listing promotions... giving away astronomical and previously unimaginable numbers of ''free'' listings... one might have expected the numbers to be even greater. What's the sell-through rate? What's the year-over-year increase in listings?

Is *this* the real reason that eBay's earnings are up? Did I mis-read anything? Is there something I've overlooked?

Or is it just smoke and mirrors that's intended to baffle and confuse the casual reader. ~~ If so, then they TRULY succeeded as far as I'm concerned.

I can't make heads or tails of it.



Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Thu Apr 19 01:41:28 2012
The earnings increase from Ebay are coming from higher fees, mostly the inclusion of shipping charges. That's not growth.

Ok so Paypal membership went up. Nothing groud breaking. Paypal's increase in revenue - higher ebay fees again.

The mobil market is all bs. That is just  cannibalizing the business that would exist from other computers.

Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Ming the Merciless
       
Thu Apr 19 02:21:51 2012
ROTFLMAO!

Hi, my name is John, and I have a great deal today on Enron stock.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: pace306 This user has validated their user name.
       
Thu Apr 19 10:18:52 2012
** Im gonna try and help out Annie ** =)

Are eBay *sales* up 17%? - Not yours, not mine, not anyone whos not a Platinum/Diamond Megaseller.

Look at the Direct Manufactorers on eBay (the ones JD and Noah have been courting since last year) THIER sales are up. Skullcandy (as an example) is moving so much product on eBay (and undercutting thier direct b&m dealers) that some are leaving to sell other brands!

I'm paying MORE to the eBay/PP machine than ever before - yes, yes you are. So am I. Never since Ive joined in 1998, have I got ''so little for so much''. Stupid me, I expect(ed) eBay to actually, if not help me - at least get out of my way. But, as we all know ... eBays job has been to help out only a certain few.

That my friends is the crux of SR1. Who complained about pictures? Who complained about parital refunds ? (when eBay refunds buyers first and asks questions later who needs ''patial refunds''?)

SR1 was crafted by Noah and the large PRO CHANNEL sellers to help rid eBay of the unwanted riff raff .. aka small sellers.

If you know eBay, then you know they loathe spending a dime on CS, on improving the site, in helping dealers with fraud, in helping sellers with USPS, so to create more divisions to monitor pictures, give out partial refunds, monitor forced money back guarentees goes against what eBay stands for. All for buyers, none for sellers (and then we charge you for it!).

The numbers that eBay claims cant be verified, and are there to placate Wall Street. They can still claim the interest on PP holds as income, they can still claim the non payments of the %20 TRS as a gain, and theres of course the cut they get back from the post office when you use eBay shipping, and all the FVF's they keep when they and paypal force FREEbays on you.

Id rather take my money to Vegas then invest in eBay stock .... but thats just me.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Roger Rabbit
       
Thu Apr 19 11:43:27 2012
"Donahoe sounded excited when he talked about a "nice series of product enhancements" during the year."

Donahoe also gets excited about shiny objects.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: Patricia This user has validated their user name.
       
Thu Apr 19 13:22:15 2012
One thing Ebay excels in and that is smoke and mirrors.  You cannot tell me the sellers did well - too many of them are complaining of lack of sales and lack of traffic.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Rexford
       
Thu Apr 19 14:18:30 2012
I think Patricia hit the nail on the head with "You cannot tell me the sellers did well - too many of them are complaining of lack of sales and lack of traffic."

If things are going so great they would not constantly be hitting sellers up for more and more fees.  The supposed increased sales would increase the revenues on their on and they would  not have to rely on constantly taking more and more from sellers.  It's just not happening no matter how they spin the numbers.

They've gotten about as creative as they can possibly get when it comes to getting more revenue from the small sellers.  I don't know why they keep trying to run the small sellers off.  Small sellers are a cash cow for them.  MOO!  
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: Digmen1 This user has validated their user name.
       Web Site
Thu Apr 19 14:27:48 2012
Yes until they publish accounts which actually show the number of sales and the total of their final value fees, in the same format each quarter, then we can never study their reports.

As everyone says, its all smoke and mirrors.
Buy you have to hand it it to JD he does manage to pull it off each quarter, and Wall Street get taken in.
Sales up 29% - yes right.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Ric
       
Thu Apr 19 17:10:19 2012
Subtract the free shipping costs now built into the selling price of items and eBay's GMV drops significantly. This is not growth it's fiction.

Subtract the value of all the unpaid items which eBay counts as sales (remember the G in GMV stands for gross - not completed sales) and GMV does looks even worse.

Subtract eBay's onerous penalty fee on shipping costs when not included in the selling price (thus artificially boosting GMV) and eBay's revenue does not look so good either.

Subtract the revenue eBay earns on shipping labels as they continue to attempt to shift sellers over to processing labels on eBay, and revenue looks even worse.

Take away all the creative math, gimmicks and revenue shifts which eBay has employed in order to make eBay appear as if performance is improving and you will see realize that inside that pretty prom dress is the pig that eBay has become.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: paperdetective This user has validated their user name.
       
Thu Apr 19 18:23:14 2012
Seems to miss average product sales prices. I bet they show a seriously downwards price. I noticed that now my largest competitors are selling at 'below cost' prices and do not include real shipping costs either nor the Ebay fees on shipping costs.

It means that my competitors and me will soon run out of stock to sell.

That makes sense since Ebay has eroded their margins such that there is no way out anymore.

The only way to see the real Ebay would be to compare the earnings data of the major Ebay sellers with Ebay's. The difference is the truth.

What Ebay now does is shifting its own losses on the Ebay marketplaces on to the sellers. That can only continue so far. From my own numbers I would guess they will have reached the limit either this or next year unless they find new 'high margin fool sellers' who will join them and let themselves be robbed of those margins.

 
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: gutspiller This user has validated their user name.
       
Thu Apr 19 18:29:32 2012
''You're going to see some really good stuff around the checkout experience on eBay''

And I can tell you what that is. It's already happening on Ebay Germany this summer. As their big example Amazon, Ebay will start to collect payments. So buyers will no longer pay the seller but Ebay. Once the payment is received, Ebay will inform the seller to send the item.

As always Ebay is making it seem very positive. You will no longer pay any PayPalfees no matter how the buyer pays and you will no longer have to chase the non-paying buyers. So for this service Ebay raises the fees with 2%.

Then Ebay still needs to transfer your money. If you like want to have it quickly you can chose to be paid by PayPal. But here come the PayPal fees. On the Ebaysite that I'm using about 30% is paid by PayPal, the rest by bank transfer. So this would be a huge fee increase.

Or you can opt to be paid by bank transfer, which means you'll have to wait for your money. The PayPal 21 days hold, might be replaces by the Ebay 21 days hold. Seeing for Ebay the buyer is always right, with the slightest problem Ebay will probably immediatly refund from your money.

I launched my own site a few months ago. It's doing very well. I hope the time Ebay introduces this new payment system globally, I will no longer need Ebay.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: Digmen1 This user has validated their user name.
       Web Site
Thu Apr 19 18:49:10 2012
@gutspill
Wow
That is going to be earth shattering!
And that also means sellers will also not get the paypal invoice with the buyers email address on it!

Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: Another Coin This user has validated their user name.
       
Thu Apr 19 22:25:30 2012
If sellers have to wait 21 days to be paid or an increase of 2% fees plus Paypal, eBay will realize a mass exodus of sellers IMO. Ebay should also expect a drop in Paypal. Sellers who leave will do everything in their power to NOT use Paypal. Ebay thinks their precious Diamonds and Chinese mass duplicates are going to make up for the loss. Ebay is already killing their antique and collectible auction foundation with lies, tricks and determined oppression. (see Auctionbytes blog Are Antiques and Collectibles Dying on eBay?) Such fools! Everyone knows what happens when a building or house's foundation is destroyed. So eBay wants to become nothing but a pay per click and advertising site? Don't most people when watching TV skip through the commercials? Buyers are already skipping past eBay and going directly to Amazon and other sites to get what they want.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Tula
       
Fri Apr 20 09:03:31 2012
Interesting. I've heard bank transfers are a very popular and common payment method in parts of Europe. Not sure how well that will fly here with people being more used to credit card purchases. If eBay is trending toward that, it's just one more step toward becoming more like Amazon, who handles payments in this manner now.  Does Amazon give you a buyer's email address? I don't sell on there yet, so I don't know how they work the process. I have received Amazon payments from other venues and those were handled smoothly, even though there is a delay in being able to transfer payments out to a bank account.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Rexford
       
Fri Apr 20 09:40:47 2012
For years eBay have been using Amazon's playbook with the exception of free listings.  Greedy eBay will never give up charging sellers listing fees and will continue to increase those fees until sellers have had enough.

The day this company went public was the day it lost its soul.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: pace306 This user has validated their user name.
       
Fri Apr 20 10:16:35 2012
*Ebay will start to collect payments*

This has been talked about for MONTHS ... Ive brought it up myself a few times.

It accomplishes a few things: (from eBays point of view)

1) It takes the pressure off Paypal and the ongoing CA lawsuit on holds. eBay and Paypal in public laugh it off, but those of us who have joined and the attornies involved are NOT laughing. This helps diffuse this. ''Its not Paypal (the worlds best INDEPENDANT payments company) doing the hold - its eBay and ''we know'' that your money needs to be held - we manage risk for a living - and YOU SIR are risky!

2) It helps eBays ''real customers'' aka buyers .. the high percentage that always find fault with everything. INR, Item not as described, late shipping, I dont like this item, I dont want ths item anymore so Ill make up a claim ... THOSE people. Since eBay holds your money - THEY can debt you as they choose for any of those above reasons or any other they choose.

3) Since eBay ONLY knows how to copy Amazon, eBay will copy Amazons ''funds are only released until after you ship'' payment plan. After all, if you cant innovate, immitate!

4) It helps thier bottom line. They can count it as revenue when they file thier yearly reports!

5) Like Paypal they will generate money off the interest.

6) Slush fund for JD and Noah

... isnt eBay wonderful?
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: mindelec This user has validated their user name.
       
Fri Apr 20 16:46:33 2012
of everything this is the one that scares the hell out of me...

"eBay will roll out a new search platform this year. "Historically, the search on eBay has been matching keyword match in the title. And that's really how we recall search on eBay. What Cassini will now do is, we'll search the entire listing for search terms and match the search query with that. So we think that will improve the accuracy and comprehensiveness of search recall.""

back around the time of the last ebay live (june 2008?), my sales dropped to nothing for several weeks and then slowly recovered until popping back up at the end of the summer.  nobody at ebay live in either the book section or the search section could tell me why.  what i found out later is they had altered the search to include the book synopsis in the catalog.  i predict a strong possibility of the same result with this change.

it's really a shame, because for me at least, sales this year have been spectacular, better than ever before.  so now of course ebay has to change something to bring up more incorrect results and make it *appear* like there are more relevant items.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
by: Digmen1 This user has validated their user name.
       Web Site
Fri Apr 20 18:25:53 2012
If ebay brings in that Cassini thing I hope they buy an extra server, cos their present search system does not pick up all listings as it is.
Rolling blackouts ?
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: WOODJUNGLE! ON EBAY
       
Sat Apr 21 08:00:06 2012
"EBay rose $5.85 to $41.73 a share and hit levels not seen since October 2007. The impetus for the gains was the company's fiscal first-quarter earnings and its full-year forecast, which eBay reported late Wednesday. "


translations: we're going to screw the sellers again for more money... stay tuned.
Perminate Link for eBay Releases First Quarter 2012 Earnings   eBay Releases First Quarter 2012 Earnings
This user has validated their user name. by: Ming the Merciless
       
Sat Apr 21 17:55:13 2012
"EBay rose $5.85 to $41.73 a share and hit levels not seen since October 2007. The impetus for the gains was the company's fiscal first-quarter earnings and its full-year forecast, which eBay reported late Wednesday. "

Ebafia has done to warrant such a sudden but predictable stock price increase during Q1.

The stock began to move when the Wall Street banksters gave them a target of $38.00 a share.

Ebafia is showing no actual growth but revenue shifting and questionable bookkeeping practices have manipulated the picture, and that's been true since The Ho took over.

This is another picture perfect example of how the banksters and their criminal corporate cohorts manipulate individual stocks to suit their own purposes.
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