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Wed Oct 21 2009 16:20:32

eBay Press Release on Third Quarter 2009 Results

By: Ina Steiner

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SAN JOSE, Calif.--(BUSINESS WIRE)--eBay Inc. (Nasdaq:EBAY) today reported financial results for the third quarter ended September 30, 2009. The e-commerce company posted third-quarter revenue of $2.2 billion, up $120.3 million from the same period last year. The year-over-year revenue growth was driven primarily by the continued growth in PayPal, Skype, the company’s classifieds business as well as growth in eBay’s fixed-price format. The company recorded net income on a GAAP basis of $349.7 million or $0.27 per diluted share, and non-GAAP net income of $501.5 million or $0.38 per diluted share.

GAAP operating margin decreased to 19.8% for the quarter, compared to 24.7% for the same period last year. Non-GAAP operating margin decreased to 28.4% for the quarter, compared to 31.8% for the same period last year. The decrease in operating margins was caused primarily by the recently acquired Bill Me Later, the weaker U.S. dollar, and the company’s continuing shift to faster growing, lower margin businesses, partially offset by cost controls.

eBay Inc. generated $738.2 million of operating cash flow during the third quarter. Free cash flow during the quarter was $563.5 million.

“Our third quarter results were strong with PayPal gaining momentum and market share worldwide and our core eBay business showing positive trends,” said eBay Inc. President and CEO John Donahoe. “We’re delivering on our commitments, executing on our plans and operating smarter and faster.”


Quarterly Business Unit Discussion

Payments

The Payments business unit reported a strong quarter with $688.1 million in revenue, an increase of 15% year over year. Net total payment volume (TPV) for the quarter was $17.7 billion, an increase of 19% year over year. The revenue and TPV increases were driven by continued consumer and merchant adoption of PayPal. The payments business continued to increase its penetration on eBay and across e-commerce. Active registered accounts reached 78.0 million, an increase of 19% year over year. The Payments business will continue to focus on the acquisition of new merchants, greater penetration into the Marketplaces business and the ongoing integration of Bill Me Later.

Marketplaces

The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other e-commerce sites, recorded $1.4 billion in revenue, a 1% year over year decline. Marketplaces net transaction revenue declined 1% year over year, improving 13 points over the second quarter of 2009. The Marketplaces business unit benefited from strong growth in its fixed-price format, the continuing success of its highest rated sellers, and acceleration in sold items. Excluding the impact of the stronger U.S. dollar, revenue growth in the Marketplaces business was 4% year over year. Marketplaces continued to expand its international business, which accounted for 56% of Marketplaces revenue. GMV (excluding vehicles) was $12.2 billion for the quarter, an increase of 7%, compared to the third quarter of 2008. Online classifieds revenue increased 20% year over year driven primarily by the acquisition of Den Blå Avis and BilBasen. A continued focus on trust, value and selection in the eBay Marketplace coupled with format expansion are expected to drive future GMV.

Communications

Skype contributed $185.2 million in revenue for the quarter, representing 29% year-over-year growth. Skype added 40.3 million registered users during the quarter and ended the period with more than 520.8 million registered users. In addition to growing its user base, Skype is focused on product strategies to enhance customer engagement. In September, eBay announced the sale of 65% of Skype to a group of private equity investors that is expected to close in the fourth quarter.

Other Selected Financial Results

    * Taxes — The GAAP effective tax rate for the quarter was 20%, compared to 13% for the third quarter of 2008. The non-GAAP effective tax rate was 21% for the third quarter of 2009, compared to 17% for the third quarter of 2008.
    * Cash and cash equivalents — The company’s cash and cash equivalents totaled $2.6 billion at September 30, 2009, compared to $3.2 billion at December 31, 2008.

Business Outlook

    * Fourth-quarter 2009 — eBay expects net revenues in the range of $2.20 billion to $2.30 billion with GAAP earnings per diluted share in the range of $0.28 to $0.30 and non-GAAP earnings per diluted share in the range of $0.38 to $0.40. These amounts assume a mid-quarter close date for the pending sale of Skype and do not reflect the gain on the pending sale of Skype of approximately $1.0 billion.

Quarterly Conference Call

eBay will host a conference call to discuss third quarter results at 2 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 Web site at http://investor.ebayinc.com. In addition, an archive of the webcast will be accessible through the same link.

About eBay Inc.

Founded in 1995, eBay Inc. connects hundreds of millions of people around the world every day, empowering them to explore new opportunities and innovate together. eBay Inc. does this by providing the Internet platforms of choice for global commerce, payments and communications. Since its inception, eBay Inc. has expanded to include some of the strongest brands in the world, including eBay, PayPal, Skype, StubHub, Shopping.com, and others. eBay Inc. is headquartered in San Jose, Calif.




Comments (47) | Permalink

Readers Comments

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: joe

Wed Oct 21 16:41:44 2009


As I said earlier today at 9:44am I got out of all my ebay stock and went short at 25.60.

Pity the poor fool who bought above that price...life is great.

Thank you John Donahoe

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Patricia

Wed Oct 21 16:59:39 2009

Yet another nosedive.....priceless!  And they're still keeping Donahoe...for what?  Maybe used as a doorman...or doormat, whichever is needed most!

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Daisy

Wed Oct 21 17:11:25 2009

How much longer are they going to let this fool run Ebay? Enough yet?

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: o.c.d.collectibles

Wed Oct 21 18:06:32 2009

   * Cash and cash equivalents — The company’s cash and cash equivalents totaled $2.6 billion at September 30, 2009, compared to $3.2 billion at December 31, 2008.

there goes someone's golden parachute!!

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Ron

Wed Oct 21 18:10:45 2009

A 29% earnings drop on a 6% sales increase?  And this mitigated by strong Paypal results.  Their marketplace strategy is in serious trouble.  I hope that they're not planning on riding it out.  By the way, I was notified today that I no longer had an account manager, which I've had for 7 years.  No great surprise.  If they think that they're going to make more money by cutting costs in service, that's one more mistake.  

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: o.c.d.collectibles

Wed Oct 21 18:11:45 2009

Will someone please interpret this for me?  


"The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other e-commerce sites, recorded $1.4 billion in revenue, a 1% year over year decline. Marketplaces net transaction revenue declined 1% year over year, improving 13 points over the second quarter of 2009."

When there is a DECLINE, how can there be an IMPROVEMENT??? I find those two terms incompatible, at least when it refers to "investment" purposes..

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: fruity

Wed Oct 21 18:24:42 2009

I guess they're not making enough money from all those account freezes and holds. lol

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Patricia

Wed Oct 21 18:30:24 2009

"When there is a DECLINE, how can there be an IMPROVEMENT??? I find those two terms incompatible, at least when it refers to "investment" purposes.. "

That's easy....the decline wasn't as bad as it was before - therefore, that's an improvement!  Ebay-speak LOL

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: o.c.d.collectibles

Wed Oct 21 18:41:50 2009

Re: Patricia!

LOL! Oh! I get it!


It's an "improvement" because the "decline" is "only" a SMALLER DECLINE instead of a GIGANTIC decline!! GOT IT!!

Ebay certainly has a CREATIVE way with WORDS for their quarterly results reports for their investors, don't they?

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Let the Eagles Sore

Wed Oct 21 18:42:23 2009

Too bad this site is filled with so many anti-ebayers. Anyone making a valid arguement on eBay's behalf is shouted out, called an eBay spy or employee, or bullied by a spiteful few. For the successful eBayer's - the tens of thousands of successful sellers, here's some objective analysis from CNN:

The positive results were the outcome of changes eBay has been implementing since 2008, said Sandeep Aggarwal, a senior Internet research analyst at Collins Stewart. The modifications include altered fees for merchants to encourage fixed-price sales and an improved search engine.

The marketplace unit, which includes eBay's core auction business, posted $1.4 billion in revenue, down 1% since last year. But the total amount of goods that eBay sold, excluding vehicles, also known as GMV, rose 7% to $12.2 billion in the quarter.

"The single biggest thing we found most positive was that GMV is showing signs of growth acceleration. Even if you include auto sales, it was still up 2% on a year-to-year basis," said Aggarwal, who expected the figure to decline by 1%.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Patricia

Wed Oct 21 18:55:13 2009

"Too bad this site is filled with so many anti-ebayers. Anyone making a valid arguement on eBay's behalf is shouted out, called an eBay spy or employee, or bullied by a spiteful few. "

...and yet you keep coming back.......

tomorrow, when the stock market opens you're going to see just how successful Ebay is.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Jim

Wed Oct 21 18:59:07 2009

Yahoo eBay Stock Blog.  

For those who want to see what the stockholders think:

http://messages.finance.yahoo.com/mb/ebay

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Let The Eagles Sore

Wed Oct 21 20:43:56 2009

The above Eagles Sore post was not by me, it's from an ebay propagandist, probably "Steve" knowing he's discredited. HAHA sucks to be Ebay don't it! At least they covered JD's golden Parachute fee.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

This user has validated their user name. by: Ming the Merciless

Wed Oct 21 20:44:04 2009

@ Let the Eagles Sore

A song written and performed by our beloved former US Attorney General, John Ashcroft)

Oh wait! That's Soar not Sore. Anyone imprudent enough to sore with ebay may have get antibiotics.

Sandeep Aggarwal has been discussed in depth here.

This ebay toady owns a great deal of ebay stock so his comments are most certainly NOT objective or bias free.

Aggarwal is the poster child for why no one should invest one red cent with Collins Stewart.

Nice try, San Jose. Next time, send an  adult to this blog.

DEATH to ebay in 2009 or quarter by quarter until The End comes.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Sore at ebay.

Wed Oct 21 21:12:57 2009

Yup Ebay is only down 1% over a year ago, Amazon up 35+% Ebay wins, HAHAHA! So, Sorehead, in your world, I guess the guy finishing last in the race wins? Guess Sanddab forgot to mention the Sell Thru Rate. There are 3 times MORE lousy junk China goods on site, and Ebay only managed a 7% rise in sales over what is typically the worst quarter of the year. While every other internet site is way way up. I guess Ebay has a lead parachute dragging it down, eh?

And how did Ebay adjust User fees? I guess all us peons weren't included in that deal. We're just the noisy unwashed scum to Ebay management.

Oh and Dude from Ebay? It's let the Eagles SOAR!

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Fred

Wed Oct 21 22:00:59 2009

Ebay broke a 12 month decline in gross sales with a 7% increase.  This is being spun as a turnaround, and the shorts will get squeezed tomorrow.

Only down 4% afterhours.  I bet it opens at 24 and hits 26 tomorrow.

A nice 80% gainer from January - more than 100% since it's low at $12.

Company SUCKS, but it's a fabulous trading stock!

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: RicRoe

Wed Oct 21 22:59:39 2009

So Q3 2009 results are a 1% drop over Q3 2008, and that is supposed to be accepted as an improvement....

But Q3 2008 was also lower than Q3 2007.

Donahoe claims that changes are having a positive effect on eBay marketplace... what's wrong with that picture?

Sales in a prolonged 1 year decline, now profits too are down.

Over at Amazon, traffic is increasing, sales continue to rise, profits are stable, buyers are happy and spending despite the recession.

Still Donahoe and his team continue to believe everything is just fine with eBay and the changes that have been alienating buyers and sellers alike

It's no wonder eBay sales continue their decline now for the 4th consecutive quarter. Thats some achievement Mr Donahoe...

Remind me never to hire a Dartmouth graduate, as they seem to be rather dense and are not too bright.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: This Eagle is Sore!

Thu Oct 22 00:12:36 2009

John Donahoe=Epic failure
Amazon must be having a big party today, and their results are going to make ebay look like the joke it is.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

by: Ebay board lockdown

Thu Oct 22 00:19:51 2009

I guess Ebay is scared of the press & investor reaction to these crummy results, Lieworld reset the board so you can only get in even to view if you are registered & signed in.

eBay Press Release on Third Quarter 2009 Results   eBay Press Release on Third Quarter 2009 Results

This user has validated their user name. by: Bill

Thu Oct 22 00:59:34 2009

If revenue goes up but profit goes down is, as anyone who has been in business knows, a very bad sign and it is telling every one to get out now.
They are wasting money and energy on the wrong things. Yes the revenue goes up because the listings have gone up and Skype and PayPal have gone up but they are not selling the same percentage of listings as before so the profit goes down. eBay is loosing their market share and they are wasting money and effort trying to get it back by going in the wrong direction.
It is a rusty old ship that keeps on springing leaks and how long are the pumps (investors on Wall Street) going to keep it afloat.
Many of the crew (workers and sellers) see it and they are jumping ship.
The Captain still goes on like nothing is wrong and the crew look at him like he is a complete idiot.
Our eBay sales are still down y/y but they are coming back.
Example of our sales:

Q1-09 was down 36.5% from Q1-08
Q2-09 was down 55.4% from Q2-08
Q3-09 was down 21.8% from Q3-08

Q3-09 was up 2.5% from Q1-09
Q3-09 was up 35.2% from Q2-09

We are a TRS with 4.9's and deal in Hobby items, not the run of the mill CD's, DVD's and Electronic items that you can find any where but that is what the Captain is pushing for eBay when it was originally built on collectible's and hobby related type things.
People are not going to go to eBay to find the general run of the mill type items and they never will. They can find it all a lot easier and cheaper on Amazon.

Until the management at eBay realizes that they will still keep sailing a rusty old ship that will eventually sink or run aground.

Bill

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