Slump in euro hits PayPal-driven hike in profits for eBay
ONLINE auction site eBay, which employs nearly 2,000 people at its European headquarters in Dublin, yesterday reported second-quarter profit that topped analysts' estimates while predicting that a foreign-currency slump would eat into overseas sales this year.
PayPal, the online transaction company that is owned by eBay, was the main driver of eBay's profit, delivering a record second-quarter performance.
It added a million new accounts each month during the quarter, and revenues jumped 22pc to $817m (€633.2m).
Agreements with banks in China, Singapore and Australia have helped drive PayPal's expansion.
Net income rose 26pc to $412.2m, or $0.31 a share, from $327.3m, or $0.25, the company said.
Excluding some costs, the earnings were $0.40 a share.
Sales rose 5.6pc to $2.22bn and revenue in the third quarter is expected to be $2.13bn to $2.18bn, eBay said.
Even as eBay recovers from a slowdown in spending, the company's international focus threatens the pace of its turnaround.
The falling euro and other currencies are diminishing the value of receipts reported in dollars.
The company gets more of its revenue from overseas than any other large US-based internet company.
"The currency is a one-time thing affecting most international businesses," said Bill Smead, head of Smead Capital Management, an eBay investor.
"We like this report," he said.
In March, eBay lowered and eliminated some listing fees in its Marketplaces business to encourage more merchants to use the service. The company said those changes would boost results in the second half of the year.
Mobile services have become a source of growth for the company. Though it trails Amazon in overall growth, eBay has become the top mobile retailer in the US.
Goods sold through Apple's iPad, iPhone and other mobile devices will more than double to $1.5bn this year," eBay has said.