EBay beats revenue estimate, bumps up forecasts

(Reuters) - Online retailer eBay Inc reported better-than-expected quarterly revenue and raised its sales forecast for the year as efforts to revamp its online marketplace start to pay off.

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014. REUTERS/Kacper Pempel/File Photo

EBay shares were up 8 percent after the bell on Wednesday after the company’s board also authorized an additional $2.5 billion stock buyback program.

The company, which spun off PayPal last July, has tackled slowing growth by focusing on small business sellers, while offering a bigger selection of products.

Gross merchandise volume, or the total value of all goods sold on its sites, was up 4 percent at $20.9 billion in the second quarter ended June 30, helped by strength in its U.S. business.

The number of active buyers rose 4 percent to 164 million.

The company’s revenue also got a boost from robust sales at Stubhub, which won a 6.5 year revenue-sharing deal to resell tickets for the New York Yankees last month.

Stubhub’s revenue jumped 40 percent to $225 million in the latest quarter.

EBay raised its full-year revenue forecast to a range of $8.85 billion to $8.95 billion, from $8.6 billion to $8.8 billion; and adjusted profit from continuing operations in the range of $1.85 to $1.90, from $1.82 to $1.87 per share.

The improved forecast was a “positive surprise” this early in the year, Wedbush Securities analyst Gil Luria said.

For the third quarter, the company forecast revenue of $2.16 billion to $2.19 billion and adjusted profit from continuing operations of 42 to 44 cents per share.

Analysts on average expect profit of 44 cents per share and revenue of $2.14 billion, according to Thomson Reuters I/B/E/S.

The company’s net income rose to $435 million, or 38 cents per share, in the latest quarter from $83 million, or 7 cents per share, a year earlier.

Excluding one-time items, eBay earned 43 cents per share, beating analysts’ expectations by 1 cent.

Revenue rose 5.7 percent to $2.23 billion, ahead of analysts’ average estimate of $2.17 billion.

Up to Wednesday’s close, shares of the San Jose, California-based company had fallen 5.6 percent in the past 12 months.

Reporting by Anya George Tharakan and Arunima Banerjee in Bengaluru; Editing by Anil D’Silva