Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Jan 22 2014 16:19:55

eBay Releases Fourth Quarter 2013 Earnings

By: Ina Steiner

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eBay's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing fourth quarter 2013 earnings, you can view the full release with tables on eBay's investor relations website.

Note the reference to the proposal from Carl Icahn in eBay's release.

eBay Inc. Reports Fourth Quarter and Full Year 2013 Results

    Volume Accelerated to 21% for Full Year
    Revenue Growth 14% for Full Year
    Non-GAAP Earnings Growth 15% for Full Year
    Company announces $5 Billion Stock Repurchase Authorization
    Company Discloses Proposals Received from Investor Carl Icahn

January 22, 2014 04:15 PM Eastern Standard Time
SAN JOSE, Calif-Global commerce platform and payments leader eBay Inc. (Nasdaq: EBAY) today reported that revenue for the fourth quarter ended December 31, 2013, increased 13% to $4.5 billion, compared to the same period of 2012. The company reported fourth quarter net income on a GAAP basis of $850 million, or $0.65 per diluted share, and non-GAAP net income of $1.1 billion, or $0.81 per diluted share. Fourth quarter non-GAAP and GAAP earnings per share increased 16% and 14%, respectively, driven primarily by strong top-line growth. For the full year 2013, revenue grew 14%, non-GAAP earnings per share grew 15%, and GAAP earnings per share grew 9%.

Total company Enabled Commerce Volume (ECV) increased 22% in the fourth quarter, accelerating one point, to $61 billion in commerce volume for merchant partners and brands. For the full year, ECV increased 21%, accelerating two points to $212 billion. Both Marketplaces and PayPal achieved record mobile results in 2013, each exceeding $20 billion in mobile volume. Mobile users represented 40% of eBay Inc.’s 36 million new users and accounts in 2013, contributing $35 billion in ECV, up 88%.

“We feel good about our performance and strong finish in the fourth quarter, with the holiday shopping season clearly showing how online, mobile and other omni-channel commerce capabilities are changing how consumers shop and pay,” said eBay Inc. CEO and President John Donahoe. “Mobile exceeded expectations for the year. Our total mobile commerce volume grew 88 percent, with eBay reaching $22 billion and PayPal hitting $27 billion in 2013. And mobile added more than 14 million customers. PayPal and eBay together create an incredibly strong global commerce ecosystem for consumers and merchants, and we continue to see tremendous growth opportunities ahead.”

PayPal delivered a strong fourth quarter performance with accelerating momentum in its merchant services business. Revenue increased 19% in both the quarter and the full year, resulting in $6.6 billion in 2013. PayPal gained 5.2 million active registered accounts in the quarter and ended the year with 143 million, a 16% increase. PayPal's net total payment volume (TPV) grew 25% in the quarter with 3 billion transactions generating $180 billion in net TPV for the full year. On-eBay payment volume grew 14% in both the quarter and for the full year, producing $54 billion in net TPV for the year. Merchant Services net TPV increased 31% in the quarter and 29% for the full year, resulting in $125 billion in net TPV for the year. Mobile was a key catalyst, with payments volume off eBay growing 128% for the year. Total mobile payment volume for the year was $27 billion. The fourth quarter also saw the close of the Braintree acquisition.

Marketplaces gross merchandise volume (GMV) excluding vehicles grew 13% in both the fourth quarter and full year totaling $76.5 billion in 2013, driven primarily by strong growth in its domestic business. Revenue grew 12% in both the fourth quarter and the full year, totaling $8.3 billion in 2013. Marketplaces gained 4.6 million active users in the quarter and ended the year with 128 million active users. Its U.S. business grew 14% in the fourth quarter and 15% for the full year, generating $30.4 billion in GMV excluding vehicles for the year. Its international business grew 12% in the quarter and for the full year, generating $46.1 billion in GMV excluding vehicles for the year. Mobile continued to gain traction during 2013 with 40% of all GMV in the fourth quarter involving a mobile device touch point, resulting in $22 billion in mobile commerce volume for the full year. Fixed price GMV excluding vehicles grew 19% globally in the fourth quarter and represented 73% of total GMV.

eBay Enterprise generated $1.8 billion in Merchandise Sales in the fourth quarter and $4.2 billion for the full year, up 11% in the quarter and 14% for the full year. It produced $1.1 billion in revenue for the full year with growth pressured by merchant and channel mix and reduction in take rate. eBay Enterprise enabled its clients to grow same-store sales 13% in the quarter and 15% for the full year, outpacing ecommerce growth rates in the U.S. Enterprise clients are increasingly adopting technology from across the eBay portfolio: PayPal has 97% coverage with growing utilization of Bill Me Later; Marketplaces has 33 Enterprise accounts live on its platform and growing penetration of its eBay Now platform.

Other Selected Financial Results

    Operating margin — GAAP operating margin increased to 22.6% for the fourth quarter of 2013, compared to 21.9% for the same period last year. Non-GAAP operating margin increased to 29.2% for the fourth quarter, compared to 28.5% for the same period last year.
    Taxes — The GAAP effective tax rate for the fourth quarter of 2013 was 17%, compared to 14% for the fourth quarter of 2012. For the fourth quarter of 2013, the non-GAAP effective tax rate was 20% compared to 18% for the fourth quarter of 2012. The increase in the GAAP effective tax rate was due primarily to an increase in earnings in higher tax jurisdictions.
    Cash flow — The company generated $1.7 billion of operating cash flow and $1.4 billion of free cash flow during the fourth quarter. For the full year the company generated $5.0 billion of operating cash flow and $3.7 billion of free cash flow.
    Stock repurchase program — The company repurchased approximately $254 million of its common stock in the fourth quarter.
    Cash and cash equivalents and non-equity investments — The company's cash and cash equivalents and non-equity investments portfolio totaled $12.8 billion at December 31, 2013.
    Proposal from Carl Icahn — The company also announced today that it has received a notice from Carl Icahn indicating that he has nominated two of his employees to its Board of Directors and submitted a non-binding proposal for a spinoff of its PayPal business into a separate company. The notice stated that companies controlled by Mr. Icahn had, earlier this month, acquired shares and derivative securities that give him an economic interest of approximately 0.82% in the company.

    eBay welcomes the opportunity to listen to the perspective of all of its shareholders, including Mr. Icahn. His Board nominations will be passed on to the Board’s Corporate Governance and Nominating Committee, which will consider them in the ordinary course of business. We would note that eBay has a world-class board of directors with directors who have significant experience in technology and financial services.

    Regarding Mr. Icahn’s separation proposal, eBay’s Board of Directors routinely assesses the company’s strategic direction and has explored in depth a spinoff or separation of PayPal. eBay’s Board of Directors has concluded that the company and its shareholders are best served by the current strategic direction of the company and does not believe that breaking up the company is the best way to maximize shareholder value. As part of eBay Inc., PayPal is able to leverage the company’s technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide. Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders.

    eBay Inc.’s Board of Directors and management remain focused on delivering sustainable results and driving long-term value for all shareholders.

    The company will provide additional perspective during and after its quarterly earnings call scheduled for Wednesday Jan. 22nd at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time.

Business Outlook

2014
    First quarter 2014 — eBay expects net revenues in the range of $4,150 - $4,250 million with GAAP earnings per diluted share in the range of $0.51 - $0.53 and non-GAAP earnings per diluted share in the range of $0.65 - $0.67, which includes dilution of $0.02 and $0.01, respectively, resulting from the Braintree acquisition.
    Full year 2014 — eBay expects net revenues in the range of $18,000 - $18,500 million with GAAP earnings per diluted share in the range of $2.40 - $2.45 and non-GAAP earnings per diluted share in the range of $2.95 - $3.00, which includes dilution of $0.08 and $0.03, respectively, resulting from the Braintree acquisition.

2015
    Full year 2015 — eBay now expects net revenues in the range of $20,500 - $21,500 million with non-GAAP earnings per diluted share growth of greater than 10%.

In January 2014, the company's board of directors authorized an additional $5 billion stock repurchase program. Together with the $640 million remaining under the company’s prior stock repurchase program authorized in June 2012, the company's total repurchase authorization as of January 22, 2014 is $5.6 billion. In addition to offsetting dilution from its equity compensation programs, the company expects, subject to market conditions and other factors, to make opportunistic repurchases of its common stock to reduce outstanding share count. Any share repurchases under the company’s stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means.

Quarterly Conference Call
eBay Inc. will host a conference call to discuss fourth quarter and full year 2013 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 or via dial-in number: 1(877) 844-0840. In addition, an archive of the webcast will be accessible for 90 days through the same link.




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This user has validated their user name. by: Puck

Wed Jan 22 16:52:12 2014

"eBay welcomes the opportunity to listen to the perspective of all of its shareholders, including Mr. Icahn..."

Like the medieval townies welcomed the sound of barbarians at the city gates.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: Puck

Wed Jan 22 16:56:58 2014

"His Board nominations will be passed on to the Board’s Corporate Governance and Nominating Committee, which will consider them in the ordinary course of business."

Corporatespeak for "His BOD nominations will never see the light of day until it looks like we may lose the proxy fight..."

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Wed Jan 22 18:57:04 2014

Pop some popcorn. It will tons of fun watching the elephants square off in the jungle.

Carl Icahn -- evil as I think he is -- is light years ahead of John Donahoe.

He's also one of the masters of the hostile takeover.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: bitbybit

Wed Jan 22 19:04:14 2014

"We would note that eBay has a world-class board of directors with directors who have significant experience in technology and financial services."

Obviously not one on the BOD has ever actually used ebay to buy or sell and know NOTHING about all the day to day tech glitches. Maybe the word "technology" should be crossed out from that statement. Without Paypal they know ebay is worth little.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Wed Jan 22 19:13:33 2014

John Donahoe is running scared.

This is why ebay announced the MASSIVE stock buy back.

Run, John, Run. You're toast.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Wed Jan 22 19:29:37 2014

Wall Street has pressured both Donahoe and Whitman for years to divest PayPal.

The Ho's been directing voodoo bookkeeping for years. Without PayPal, the Emperor's new clothes will be glaringly visible, and I hope the feds come after him and the CFO with guns blazing.

Thieves, liars, and crooks all.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Wed Jan 22 19:39:21 2014

With respect to Ebay's self proclaimed "World Class" Board of Directors, I ask: which which world, planet?

When BoD's focus only on numbers without even a modicum of comprehension about the environment that created those numbers, you end up with the self inflicted collective myopia responsible for ebay's decline.

3P sellers like ourselves should be very leery of Icahn and what he might do. He's possibly more dangerous to our livelihoods than The Ho.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: bitbybit

Wed Jan 22 20:56:17 2014

Ebay actually lost more than $30M, much, much more. Hiding all those listings and buyers not being able to find what they were actually looking for. Too bad we will never know how many millions were actually lost but I am sure it was substantial.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: bitbybit

Wed Jan 22 21:06:10 2014

I was responding to a post that disappeared. At least I thought it was this thread.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: NaruMessenger
Web Site

Wed Jan 22 21:34:04 2014

Guess someone got their feelings hurt over an email I sent her. RE: eBay redirect scams on eBay Motors. Visit ebaymotorssucks.com and watch the video on the home page. I reveal the source code of the redirect scam. Counted 18 of them this morning. LOL!

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: ebayisajoke
Web Site

Wed Jan 22 21:49:59 2014

Why are we talking about this, and not the redirect scams that eBay supporting on eBay motors? is someone getting the stories mixes up? I could care less about ebay's earnings. They are false, made up, anyone ever here of Voodoo economics?

Please visit www.ebaymotorssucks.com and check out the information Doc uncovered about the eBay redirects. This is where the story is people!.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

by: comet This user has validated their user name.

Thu Jan 23 01:36:25 2014

Sound of shot gun racking

Run HO run

Boom

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

by: ebay refugee camp This user has validated their user name.

Thu Jan 23 10:15:48 2014

Any gains were the natural progression of online sales becoming the way people shop, so ebay gained nothing.
Stock buy back is the real story here.
Until Donahoe and Swan are removed a slide will continue, the dollar amount of money lost due to sellers fleeing to other marketplaces has to be staggering. My off ebay sales so far this year are wonderful, those use to be ebay sales. To hear Donahoe tell it the sellers who left are dishonest and not trustworthy, sorry that is just not true.
I am just a lowly seller with 45 years of retail experience what do I know?
Ebay gets its FVF first that is the problem along with John Donahoe and Robert Swan who received 50 million in bonus.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

by: Eric Saeger This user has validated their user name.

Thu Jan 23 10:37:28 2014

Not being very stock savvy, I'm a little lost here.  Can Refugee or Ming explain the significance of the stock buyback?  Does it mean they're trying to ward off Icahn?  
Personally I'd love to see Paypal divested, so that whatever corporate dingbat is left standing will have to look at marketplace/core and figure out why the numbers suck so bad.  Maybe do some advertising for once?  Maybe stop jamming non-Asian eBay sites with Asian trash?  The site looks a Dollar Knockoff General where nobody sweeps the floor, for cripes sake.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Thu Jan 23 16:39:47 2014

Am I missing something? Stock buy-backs should increase the value of the remaining stock; has that ever happened with eBay stock?

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: NaruMessenger
Web Site

Fri Jan 24 10:24:32 2014

If anyone is interested, here is the contents of that hidden eBay Inline frame i mentioned in my last video. Using a Firefox plugin called NoScript i was able to stop the redirection and view the source code. It's JavaScript that's doing the redirect.

https://www.youtube.com/watch?v=ZuAvWduvzh0

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

by: Digmen1 This user has validated their user name.
Web Site

Sat Jan 25 17:37:17 2014

Contrary to predictions by most regular posters on this forum ebay keeps increasing its sales and income and its share price has gone up a lot.
And its Alexa rating is still the same.

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

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

Sat Jan 25 18:45:18 2014

"... and its share price has gone up a lot."

You obviously have a peculiar concept of the meaning of "gone up a lot" ...

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

This user has validated their user name. by: bitbybit

Sat Jan 25 21:44:40 2014

"Contrary to predictions by most regular posters on this forum ebay keeps increasing its sales and income and its share price has gone up a lot."

If sales have gone up a lot, how come my pockets are inside out?

Perminate Link for eBay Releases Fourth Quarter 2013 Earnings   eBay Releases Fourth Quarter 2013 Earnings

by: Digmen1 This user has validated their user name.
Web Site

Tue Jan 28 14:00:24 2014

To me, doubled is a lot.

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