(Adds executives' comments)
By Edwin Chan
SAN FRANCISCO, July 16 EBay Inc posted
a 13 percent rise in quarterly revenue on Wednesday, as
better-than-expected results from its fast-growing PayPal
division helped the online retailer overcome increasing
competition from Amazon.com Inc and a well-publicized
Investors had been braced for a tough quarter.
Ebay's stock has fallen more than 8 percent since April,
hurt by the cyber attack disclosed in May that compromised data
for some 145 million customers, the departure of highly regarded
PayPal chief David Marcus, and intensifying competition from
both online and offline rivals.
EBay was also hurt by a change in Google Inc's
algorithm, which pushed eBay results lower in search rankings,
That slowdown was seen in June in a measure of transactions
across eBay's core Marketplaces platform, known as gross
merchandise value, with the growth rate falling to 7 percent
from around a double-digit pace in previous months.
"We had a challenging first half of the year with several
distractions," Bob Swan, the chief financial officer, told
analysts on a conference call, noting that the cyber attack and
the Google search engine changes "had an immediate and dramatic
Executives said eBay will spend more on measures to entice
users back, including coupons, seller incentives and increased
Several investment brokerages had downgraded their forecasts
ahead of Wednesday's results. The second-quarter results and
eBay's revenue outlook were roughly in line with those tempered
Revenue rose to $4.37 billion for the quarter, compared with
$3.88 billion a year ago; Wall Street had forecast revenue of
$4.38 billion, on average.
Payment volume leaped a better-than-expected 29 percent.
Gross merchandise value grew 12 percent, in line with or
slightly better than analysts' forecasts.
Going forward, eBay will have to grapple with stiffening
competition across its businesses.
Marcus departed for Facebook's messaging team in June. The
payments service faces a growing challenge from the likes of
Amazon, which launched a recurring payments program in June.
Google is also expected to delve further into this
Brick-and-mortar retailers are investing to boost their
online presence. EBay also has to fend off a growing coterie of
fast-growing retail upstarts that focus on specific categories
such as home and apparel.
Longer term, industry analysts speculate that Chinese
e-commerce giant Alibaba Group Holdings Ltd IPO-BABA.N, which
is going public this year in what could be the largest-ever tech
IPO, is preparing to leverage its U.S. investments into a play
for the U.S. retail arena, the world's largest.
On Wednesday, eBay forecast third-quarter revenue of $4.3
billion to $4.4 billion, compared with expectations for $4.4
billion, according to Thomson Reuters I/B/E/S.
For the second quarter, it posted non-GAAP earnings per
share of 69 cents, a penny better than forecasts for 68 cents.
Shares in eBay rose slightly to $50.94 after hours, from a
close at $50.70 on the Nasdaq.
(Reporting by Edwin Chan; Editing by Richard Chang and Leslie