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Wed Oct 20 2010 16:21:51

eBay Announces Third Quarter 2010 Earnings

By: Ina Steiner

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eBay's conference call with analysts is scheduled for 5:00 pm Eastern today (October 20, 2010). Here is the company's press release announcing third-quarter results for 2010, you can view the full release with tables on eBay's investor website.

eBay Reports Strong Third Quarter Revenue and Earnings Growth
Global ecommerce and online payments leader eBay Inc. (Nasdaq: EBAY) today reported that revenue for the fiscal third quarter ended September 30, 2010, increased 1% to $2.2 billion, or up 10% excluding Skype, compared to the same period of 2009. The company recorded third quarter net income on a GAAP basis of $431.9 million, or $0.33 per diluted share, and non-GAAP net income of $530.6 million, or $0.40 per diluted share, representing a 14% increase excluding Skype, compared to the same period of 2009.

The company's PayPal business delivered strong third quarter performance, expanding its leadership position in online payments with growth in revenue, total payment volume and active registered accounts. PayPal ended the quarter with 90 million active accounts worldwide adding more than a million new accounts each month during the quarter. And for the fourth consecutive quarter, Merchant Services net total payment volume grew 40% or more year over year. The Marketplaces business continued to make progress in improving the customer experience and drove customer-focused innovation in key areas, including mobile commerce and fashion. Sold items, excluding Gmarket, were up almost 13% year over year and accelerated in the US and UK.

"We delivered strong third quarter results, with great performance at PayPal and stable results at eBay," said John Donahoe, eBay Inc. President and CEO. "PayPal gained share globally and eBay continued to improve key metrics. Our company is strong and we are managing our global portfolio to balance strengths, challenges and opportunities, invest in growth and deliver consistent performance."

Third Quarter 2010 Financial Highlights (presented in millions, except per share data and percentages)



Other Selected Financial Results
    * Operating margin - GAAP operating margin for the third quarter increased to 21.8%, compared to 19.8% for the same period last year. Non-GAAP operating margin increased slightly to 28.7% for the quarter, compared to 28.4% for the same period last year, as productivity gains were offset in part by the impact of a stronger dollar and faster growth in the company's lower margin payments business.
    * Taxes - The GAAP effective tax rate for the third quarter of 2010 was 16%, compared to 20% for the third quarter of 2009. For the third quarter of 2010, the non-GAAP effective tax rate remained unchanged at 21% compared to the third quarter of 2009.

    * Cash flow - The company generated $747.1 million of operating cash flow and $580.1 million of free cash flow during the quarter.
    * Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled $6.1 billion at September 30, 2010, compared to $5.2 billion at December 31, 2009.
    * Stock repurchase programs - The company repurchased approximately $300 million of its common stock in the third quarter. In addition, the company's board of directors authorized an additional $2.0 billion stock repurchase program for the purpose of offsetting dilution from the company's equity compensation programs.
    * Increasing financial flexibility - To capitalize on historically low US interest rates, the company's board of directors has approved the issuance of up to $1.5 billion in term debt financing under the company's existing shelf registration statement and the establishment of an up to $1.0 billion commercial paper program. The company may seek to execute these transactions in the near term, subject to market conditions. If these financings are consummated, they would enhance the company's flexibility to invest in its business and make strategic acquisitions, as well as finance the Bill Me Later portfolio.

Business Outlook
    * Fourth quarter 2010 - eBay expects net revenues in the range of $2.39 to $2.49 billion with GAAP earnings per diluted share in the range of $0.37 to $0.40 and non-GAAP earnings per diluted share in the range of $0.45 to $0.48.
    * Full year 2010 - eBay now expects net revenues in the range of $9.05 to $9.15 billion with GAAP earnings per diluted share in the range of $1.30 to $1.33 and non-GAAP earnings per diluted share in the range of $1.67 to $1.70.

Quarterly Conference Call
eBay will host a conference call to discuss third quarter 2010 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 for 90 days through the same link.

About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments. We also reach millions through specialized marketplaces such as StubHub, the world's largest ticket marketplace, and eBay classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and its global portfolio of online brands, visit www.ebayinc.com.




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eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: My Own Website Not Quite Paying My Bills Yet

Wed Oct 20 17:31:42 2010


I'm not much of a financial analyst but in the Marketplace section it only showed a 3% increase.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: John

Wed Oct 20 17:34:15 2010

Pretty quiet here - guess it's hard to gripe about these numbers. Any way you look at them, eBay beat the street. I'd say the turnaround is picking up steam - thank you EBAY!!

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Ron

Wed Oct 20 17:36:04 2010

It's obvious that most of eBay's growth is coming from its payments business, which grew 22% and accounted for over 37.3% of total net revenue.

The marketplaces revenue grew only 3% and accounted for less than 62.7% of net revenue.  

The US marketplace business accounts for 39% of GMV while International business accounts for 61%.

Since "marketplaces" includes StubHub, Kijiji and other businesses that are probably seeing good growth, I think that it is reasonable to state that eBay.com has either remained at the same level and, much more likely, has experienced negative growth.

It's become obvious that John Donahoe's eBay strategy is an utter failure, but somehow analysts don't really care which division is driving revenue - I guess that it's just too much work and takes a little too much understanding to delve a little deeper into the numbers.

It's amazing how a CEO can look like a genius when the brunt of his efforts have failed abysmally, yet he is given credit for success in a division that's required very little in the way of strategic management.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: buck efay

Wed Oct 20 17:40:07 2010

Wait for Amazon's results, and growth in high double digits again, to put this joke of a CEO into perspective.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: My Own Website Not Quite Paying My Bills Yet

Wed Oct 20 17:52:36 2010

"eBay beat the street"

What that means is a bunch of people 'guessing' about what numbers will be and really John, don't you have enough tool orders today to ship?

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Fred

Wed Oct 20 17:55:35 2010

I had a friend give me the low down on the numbers. Ebay.com is dying, the rest is doing fairly well. Bottom Line Donahoe is killing off small and medium sellers AND big business and advertising is ebay's focus
YOU PUT LIPSTICK ON A PIG  IT IS STILL A PIG but investors do not care about that, only the businesses he has destroyed and the workers at ebay he has laid off care.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Rick1313

Wed Oct 20 17:57:56 2010

Once again, if not for PayPal, where would the rest of eBay,inc. be, if I read the basics correctly.

Let's see..their 2nd quarter report mentioned 2% growth from 2009 and this one is 1% growth.

And, of course, eBay is calling it a strong 3Q growth.

I do not claim to be anywhere near being an expert but to have a 13% increase in sold items and not realize a higher net profit shows the average price of a sold unit is going down.

We can see why eBay is running so many auction specials.

They are trying to maintain an acceptable level of profitability with Wall Street by sheer number of listings.

If they can sustain it, good for them, I guess, as that is their business.

On the other hand, affected sellers better be ready to see further drop in sales with the glut of listings that eBay is attempting to put on their site via the auction house.

The reduction in duplicate listings should actually help eBay and sellers as buyers will see less choices and buy more impulsively as a result of not wanting to miss out.

I'm sure eBay's number crunchers told them that this is the way to go. Anticipated growth in FVF should bypass losing all those listing fees.

Of course, this is if eBay implements the change correctly.

And we all know what a crap shot that is with eBay.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Rupert Pupkin

Wed Oct 20 18:01:35 2010

Used $300MM buying treasury stock to prop up the price in the open market.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Noshi Churlock

Wed Oct 20 18:22:32 2010

Of course PayPal grows. Having a PayPal account is anyone's ticket to FREE MERCHANDISE!

Pay with PayPal, file an unverified and unchallenged false claim... get free stuff! WHAT COULD BE EASIER?!

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Rupert Pupkin

Wed Oct 20 18:23:19 2010

Big spread between their $531MM net income using their own shake and bake creative accounting determinations and the $432MM that they will be required to show on their audited annual reports due to Generally Accepted Accounting Principles.

They make a point of removing vehicle sales from their GMV calculation but I guarantee that vehicle FVF's are included in their Marketplaces Net Revenue calculation.

$531MM using Generally Accepted eBain Bookkeeping.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Drake

Wed Oct 20 18:44:58 2010

Well, let's see how PAYnotyourPAL works out.  As it grows and increases in strength, there will be more and more complaints due to issues like frozen accounts.  I expect an eventual uproar, but most likely it will be from other counties who don't have a ''special relationship'' with the evil entity.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Sayonara eBay

Wed Oct 20 18:50:38 2010

In years past, JD expounded a lot more on the marketplaces revenue.  Here is what he said in October 2009's 3rd quarter report as published in Auctionbytes:

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.

In 2010, we get ebay's ''US marketplace is stable.''  In other words, flat, but why didn't we get the same analyses as last year. I'd like to know exactly what 'flat' means.

Look for it in the 'call'.  If it's not there, why has that report not been given? Why were the 2nd quarter to 3rd quarter results not given?

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Rich

Wed Oct 20 19:12:02 2010

5 years ago both Ebay and Amazon were $40/share.  After hours today Amazon is at $160/share(up 400% from 5 years ago).  After hours today Ebay is at $27/share(down 33% from 5 years ago).  Amazon is a beter place to buy and sell.  BUyers get better deals and sellers make more money.  That's why Amazon stock has crushed Ebay stock.  

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

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

Wed Oct 20 19:12:32 2010

Completely meaningless, but skillfully crafted.

Let's see -- ebay.com listing up between 700% and 800% yet market place revenues up only 3%. Anemic and pathetic ROI.

Break this fiction down, Ho! Break these reports down market place by market place.

The Wall Street lie continues. Anyone following ebay.com should now fully understand that a conspiracy among the analysts and their brokerage houses, business media, and corporations is what keeps incompetent, narcissistic sociopaths like The Ho in power.

It's ALWAYS, ALWAYS about the money.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: fat freddy

Wed Oct 20 19:23:03 2010

I HATE TO SAY " I TOLD YA ALL SO."

Bottom line is the only thing that counts.

Donut beat and wallstreet loves it.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: RicRoe

Wed Oct 20 19:26:57 2010

Pull PayPal revenue and profits out of these numbers and you can smell how badly decomposed eBay marketplace has become under John Donahoe's inept leadership.

Donahoe's  three year turn around plan has set eBay further back than it was before he began the plan.

I guess JD considers it a win when he can say " ... we s*cked...but we s*cked less than last year."

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: old timer

Wed Oct 20 19:53:27 2010

As the old saying goes: the devil is in the details.  And naturally, JD is not releasing the details that would definitively show how  eBay is doing.

I know how I am doing on eBay and how I am doing elsewhere.  eBay is no longer my primary revenue source.  That's really all I need to know.

Now, what would happen if any of the major banks/credit card companies actively went head-to-head with PayPal for on-line services?  That would be interesting and I have to think PayPal's growth record has to be attracting a lot of attention from possible competitors.  Time will tell.

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Clara

Wed Oct 20 20:44:34 2010

Paypal Merchant Services up 40%.

Is this a result of higher fees and requiring sellers to use Paypal ?

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: NO WAY

Wed Oct 20 23:01:12 2010

After Cooking the Books, that's the best numbers they could come up with?  Geee!  What losers!  

eBay Announces Third Quarter 2010 Earnings   eBay Announces Third Quarter 2010 Earnings

by: Georgeie Orwellman

Wed Oct 20 23:13:23 2010

"eBay saw solid sold-items growth that was partially offset by lower Average Selling Prices that Chief Financial Officer Bob Swan attributed to a broader selection of well priced inventory."
Newspeak at its most pure. Broder selection of well priced inventory, shouldn't that help a marketplace? Maybe very low growth and just lousy results are due to Donashmoe making war on his dealers?

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