|Wed Oct 19 2011 16:27:13|
eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter
By: Ina Steiner
eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing third quarter 2011 earnings, you can view the full release with tables on eBay's investor website.
eBay Reports Strong Third Quarter 2011 Results
SAN JOSE, Calif.-Global ecommerce and online payments leader eBay Inc. (Nasdaq:EBAY) today reported that revenue for the third quarter ended September 30, 2011, increased 32% to $3.0 billion, compared to the same period of 2010. The company reported third quarter net income on a GAAP basis of $490.5 million, or $0.37 per diluted share, and non-GAAP net income of $628.2 million, or $0.48 per diluted share. The year-over-year increase in third quarter GAAP and non-GAAP earnings per diluted share was driven primarily by strong top-line growth, partially offset by continued investment in key strategic initiatives and the impact of acquisitions.
"Our company reported another strong quarter, with eBay, PayPal and GSI each performing well," said eBay Inc. President and CEO John Donahoe. "Mobile commerce continues to accelerate as consumers change the way they shop and pay. We expect eBay mobile commerce to generate almost $5 billion in merchandise volume this year and PayPal mobile to exceed $3.5 billion in payment volume. Mobile is one way online and offline shopping are blending into a single commerce environment. We are focused on enabling commerce, helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes."
The company's PayPal business continued to expand its leadership position in global payments. PayPal ended the quarter with 103.0 million active registered accounts, a 14% increase year over year. 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 31% to $29.3 billion in the third quarter of 2011 compared to the same period of last year. PayPal continues to invest in innovation, focusing on the core platform, as well as mobile and point of sale initiatives. PayPal expects to generate more than $3.5 billion in mobile TPV in 2011, up from $750 million in 2010.
The company's Marketplaces business also delivered a strong third quarter performance. Gross merchandise volume (GMV) excluding vehicles increased by 16% year over year to $14.7 billion. U.S. GMV excluding vehicles increased 14% year over year, driven by continued improvements in customer experience on the site and growth in key shopping categories. International GMV excluding vehicles increased 18% year over year to $9.1 billion, reflecting solid growth in Europe, continued improved performance in Korea, as well as a positive impact from foreign exchange. Improved cross border trade performance contributed to GMV growth as currencies strengthened against the U.S. dollar. The company continued to benefit from growing adoption of its suite of mobile applications as downloads surpassed 50 million globally since the launch of mobile in the third quarter of 2008. eBay expects to generate almost $5 billion in mobile GMV in 2011, more than double mobile GMV in 2010.
The company's GSI business, which was acquired in the second quarter of 2011, contributed $202.6 million in revenue for the third quarter. GSI generated $608 million in global ecommerce (GeC) merchandise sales during the quarter.
Other Selected Financial Results
Operating margin - GAAP operating margin decreased to 18.1% for the third quarter of 2011, compared to 21.8% for the same period last year. Non-GAAP operating margin decreased to 25.3% for the quarter, compared to 28.7% 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, partially offset by productivity gains.
Taxes - The GAAP effective tax rate for the third quarter of 2011 was 20%, compared to 16% for the third quarter of 2010. The higher effective tax rate was due to geographic mix, acquisitions and other factors. For the third quarter of 2011 and 2010, the non-GAAP effective tax rate was 21%.
Cash flow - The company generated $809 million of operating cash flow and $526 million of free cash flow during the third quarter.
Stock repurchase program - The company repurchased approximately $33 million of its common stock in the third quarter.
Cash and cash equivalents and non-equity investments - The company's cash and cash equivalents and non-equity investments portfolio totaled $5.8 billion at September 30, 2011, compared to $7.8 billion at December 31, 2010.
Fourth quarter 2011 - eBay expects net revenues in the range of $3,200 - $3,350 million with GAAP earnings per diluted share in the range of $1.47 - $1.53 and non-GAAP earnings per diluted share in the range of $0.55 - $0.58. GAAP earnings per diluted share includes the gain from the sale of our remaining equity interest in Skype.
Full year 2011 - eBay now expects net revenues in the range of $11,500 - $11,600 million with GAAP earnings per diluted share in the range of $2.42 - $2.48 and non-GAAP earnings per diluted share in the range of $1.98 - $2.01. GAAP earnings per diluted share includes the gain from the sale of our remaining equity interest in Skype.
Update 10/20/11: Read Thursday's EcommerceBytes news story, "eBay Marketplaces GMV up 11 Percent while Auctions Lag" and let us know if you agree with the Wall Street Journal that eBay Marketplaces is showing signs of a comeback.