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Wed Oct 19 2011 16:27:13

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

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 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.

Business Outlook
    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.




Comments (34) | Permalink

Readers Comments

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Anonymous Annie

Wed Oct 19 16:59:19 2011

Well... this appears to be a press release provided by eBay itself, so I'll accept the numbers at technically factual, but I'll also take it with a grain of salt.

It's unclear to me how much of this growth came from eBay sales (if any).

What *IS* clear to me, and something for which I have no doubts....any increase in eBay revenue did not come from me.

Traffic remains flat, and sales continue to decline.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: anyone out there yet

Wed Oct 19 17:28:28 2011

Fleecebay can manipulate there figures anyway they want.

Even company does that. Just look at the auto's. Big rebate for the Volt just to make the sales look good. Most businesses inflate numbers at the end of a quarter by just putting things on sale and giving rebates.

Fleecebay is no different.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Philip Cohen
Web Site

Wed Oct 19 17:46:19 2011

Regardless, when eBay has to try to make PayPal mandatory (and exclusive, but not successfully so in Australia) to underpin their bottom line you know that things as not going as well as they claim, or could be going. The rusting old hulk is undoubtedly eventually going to founder if this arrogant, narcissistic, sociopath, Donahoe, remains at the tiller.

The fact is eBay’s stock price has moved little in the past four years; now, have a look at Amazon’ stock price. The stock market is apparently not fooled by all the spin that eBay habitually vomits; it well recognises that a headless turkey is running the eBafia farmyard.

And PreyPal will not save the eBay Marketplace; the banks/Visa/MasterCard, once they get their online act together, will eventually exorcise the PreyPal parasite that rides on their backs—at least outside of PreyPal’s mandatory use on the eBay Marketplace. And it is simply a hoax on Wall Street for the eBafia’s chief headless turkey to suggest that PreyPal could ever be a threat to the banks/Visa/MasterCard at traditional POS. Utterly delusional.

Enron / WorldCom / eBay / PayPal / Donahoe: Dead Men Walking.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: anyone out there yet

Wed Oct 19 18:14:03 2011

At some point in time the so called leaders in washington are going to find some balls and do something about paypal along with the banks.

Don't hold your breathe thou as the white house caters to the big donors.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

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

Wed Oct 19 18:34:37 2011

1. All this so-called "success" and still no dividends for shareholders.

2. No itemized breakdown of the ebay.com marketplace

3. Compare ebay report to upcoming Amazon report

4. Stock price still mired in mediocrity -- the only people who profit are the fat cat hedge fund managers who trade millions of shares daily via high speed computers and make a few cents or a couple of dollars per share.

5. Ebay stock certainly is still a very risky proposition for long termin investment or any investors except day traders

6. But most important, a corollary to Ming's Law #1:

Liars figure, and figures lie. This is all anyone needs to know about the value of this criminal corporation and sociopaths who run it.

OCCUPY SAN JOSE EBAY.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: buck efay

Wed Oct 19 18:48:49 2011

Not in my categories, 110 listings yielded 5 sales & only 4 were paid for. Sorry I even wasted .60 cents listing fees on this dog of a site. In the same period, I sold 60 packages on Amazon, and 20 between Ecrater & Bonanza.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: Mark
Web Site

Wed Oct 19 19:01:08 2011

I wonder how much, if any, of this increase comes from charging FVF on shipping?

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: Rich(y)

Wed Oct 19 21:04:43 2011

The more I ramp up my hatred for FeePal the more money they make.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Ric

Wed Oct 19 21:46:40 2011

Given that so many sellers have now been manipulated into offering "free shipping" and are including shipping costs as part of the selling price, 14% growth seems flat.

After all, Mr Donahoe has been telling all his friends on Wall Street how much mobile sales have been growing.

Of course, he neglects to come clean about "free shipping" and also omits another ominous fact.

If sales mobile sales are "exploding" and more sellers than ever are including shipping in their selling price, then there must be a pretty significant decline in traditional Internet driven sales on eBay if growth is only 14%.

Somewhere I believe that Mr Donahoe is boasting about numbers that simply do not add up in order to impress his Wall Street Analyst friends.

This helps Mr Donahoe as he spends his days with eyes glued to his smart phone watching the price of eBay stock and planning how many thousand or tens of thousand gifted shares he will be cashing in.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: WOODJUNGLE! on Ebay

Thu Oct 20 00:01:12 2011

they're running out of ways to artificially grow.  funny though.
their reported revenue increase of 32% is precisely what my fees went up after they started taking a cut on shipping.  I realized only 2/3 of the quarter included that increase though.

I still hate them.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: RevenueUp32%My*ss

Thu Oct 20 04:50:27 2011

While ebay reports a 32% increase in revenue they also report over 30% increase in funds payable and amount due customers.

Are they reporting money they take from users as revenue then declaring it as funds payable elsewhere?
How much of the $3.3 billion due customers is frozen paypal accounts?
Why did the amount due customers increase year over year?

Take ebays buyer protection scam - Buyer makes a $100 purchase by paypal - $100 paypal deposit. Buyer files ebay complaint and gets $100 refund which they deposit in buyers paypal account - Another $100 paypal deposit. Are they reporting a $100 payment as $200 in paypal deposits?

Everything about this company stinks to high heaven. Their constant lies and deceptions are sickening. Year by year it gets worse

@Ming  ''All this so-called ''success'' and still no dividends for shareholders'' here's some ammo for you:

If ebay revenue were to come from taking user money rather than sales there would be no money to pay shareholders dividends. A company that doesn't pay dividends attracts investors by being a growth company. In other words buy our stock now and later it will go up. But suppose the company is not growing?

September 29 2011 the CEO of ebay john donahoe sold 8,750 shares which were set up to sell automatically if ebay stock reached $32.28 per share. This type of insider trading at ebay is quite common. If ebay is growing why sell stock you think would go up?

Jul 28, 2011 donahoe sold 111,311 shares by automatic Sale at $33.17 - $33.23 per share for an estimated 3.7 million.
That same day donahoe exercised a $25.85 per share option for 106,000 shares at $2,740,100 effectively selling 5,000 shares of ebay stock for around $1million or proximately $200 per share.

Pay investors a dividend then try doing that!!!!

If ebay were to cash out. Pay every one they owe. Release the frozen paypal funds back to it's rightful owner. How much per share would the stockholders get?

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: OhForPetesSake

Thu Oct 20 08:56:46 2011

Isn't doesn't matter how many or how much people complain about Fleecebay or Paypal.

As long as wall street is making money the people who are doing all the complaining are blowing hot air.

Just like business " If you don't like the prices or the services you are free to go elsewhere?

A good business owner knows and understands this. 1% of all customers are those people who could never be happy no matter what.

You are free to leave at anytime.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Ina

Thu Oct 20 09:31:08 2011

See today's news story on EcommerceBytes:

http://bit.ly/ntXVW6

Do you think eBay Marketplaces is showing signs of a comeback?

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Bob

Thu Oct 20 10:18:19 2011

More of the usual "smoke & mirrors" from ebay. Once again no true "growth" here: Just increased revenue from increasing Seller fees. This time it is from the FVF they implemented on shipping charges.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Ric

Thu Oct 20 10:24:52 2011

Ina asks " Do you think eBay Marketplaces is showing signs of a comeback? "

In a word, NO !!

eBay's CEO is all about smoke and mirrors when reporting eBay results.

Mr Donahoe claims mobile sales are exploding. So if mobile sales are so significant as Mr Donahoe claims, why is eBay not showing larger GMV growth? Why only 14%

Simple. Mr Donahoe speaks as if Mobile sales represent new eBay business when in fact it is not new business. The mobile sales growth represents nothing more than the same eBay users connecting to eBay in a different way. His constant trumpeting about mobile sales growth is little more than fodder designed to impress analysts and investors to inflate eBay's share price.

Why is GMV up 14%?  The answer is obvious to sellers.

for 4 years now, John Donahoe has been attempting to manipulate sellers into including shipping cost into the selling price of an item. The more sellers he could convert to the "free" shipping model, the more GMV figures would be inflated.

When Donahoe's eBay imposed the new penalty fee on shipping costs starting last April, he assured himself of three things:

First, additional fee revenue by profiting from shipping costs when not included in the selling price.

Second, as sellers converted to the "free" shipping model in order to avoid the penalty fee, Donahoe assured he would be able to report artificially increased GMV numbers as shipping revenue would now be reported as merchandise sales for those transactions.

Third, fee revenue would increase again as eBay profits from higher Final Value Fees associated with higher selling prices with shipping included.

It is obvious that the alleged " three year turn around plan" amounted to little more than a steady increase in listing fees and final value fees over three years, to be topped with the penalty fee on shipping in year four.

Going forward, when eBay needs to boost GMV, the new method will be to increase the penalty fee on shipping costs in order to manipulate more sellers into the 'free' shipping model.

The reality is there is no significant transactional growth at eBay... reported GMV growth represents little more than the cumulative effect of higher prices associated with inflation and artificially inflated selling prices related to 'free' shipping'.

Bottom line, sales are not increasing at eBay, only selling prices and of course, fees.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: reader699983

Thu Oct 20 12:29:48 2011

Comeback? Yeah right. Does the V in GMV stand for Voodoo?

Google safe browsing tool shows a lot of trouble for our friends at ebay

"Malicious software includes 74 scripting exploit(s), 3 trojan(s).

Malicious software is hosted on 6 domain(s),...

and so on.
eek!

http://tinyurl.com/3lx83nl
http://preview.tinyurl.com/3lx83nl

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: John

Thu Oct 20 13:13:05 2011

Smoke and mirrors the real story is that the core ebay is failing. The others GSI and Paypal are propping it up. Any increase would be the natural increase of online shopping verses brick and mortar stores. Shoppers are moving online. Other Online retailers and venues have shown explosive growth but ebay is floundering like a fish out of water. Donahoe is buying other companies whose management is smarter and much more effective than he is, to prop up his lack of management skills at ebay. It is obvious the bully is a complete fake he has lots of money to play with to prop up his failures. Corporate greed and bullying is his only specialty

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

This user has validated their user name. by: Ed Gadfly
Web Site

Thu Oct 20 14:42:24 2011

So where are dividends for the shareholders?

It does not make sense that things are so great and yet so many complain about poor sales.

Who's spreading the BS?

@OhForPetesSake - Pete, thanks for the idea. Instead of koolaid I'm going to drink a nice warm cup of sake.

Did he mean rice wine or nice whine?

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: buck efay

Thu Oct 20 15:19:19 2011

"eBay CEO John Donahoe revealed during a conference call with analysts that cross-border trade out of China grew 29% in the third quarter."
Not good news for American sellers for sure.

eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter   eBay GMV for U.S. Marketplaces up 14 Percent in Third Quarter

by: Sayonara eBay

Thu Oct 20 18:39:33 2011

For a very interesting take on the market call, go to the following link. Shows why the US marketplace has grown very little this quarter.

http://eventhorizon1984.wordpress.com/2011/10/20/ebay-
inc-2011-third-quarter-earnings-call-numbers-of-interest-to-small-business-sellers/

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