EBay Inc. posted a better-than-expected quarterly profit and forecast stronger earnings for the holiday season as the Internet commerce company strives to reinvigorate its main marketplaces unit.
Shares rose 7.2 percent in after-hours trading.
EBay, which began as an online auction house, but sees most of its sales at fixed prices, is in the latter half of a three-year turnaround focused on its marketplaces unit.
The company, which also owns PayPal, expects fourth-quarter revenue of $2.39 billion to $2.49 billion, with adjusted earnings per share of 45 cents to 48 cents.
That’s above the 44 cents per share on revenue of $2.4 billion that analysts have been expecting according to Thomson Reuters I/B/E/S.
“This is good across all their businesses,” said UBS analyst Brian Pitz, adding that the results and forecast would improve lukewarm investor sentiment toward eBay. “They’re starting to see traction with marketplaces and they expect pretty decent results in the fourth quarter.”
Third-quarter net profit was $431.9 million, or 33 cents per share, from $350 million, or 27 cents per share, a year earlier.
Excluding Web telephone unit Skype, which the company sold, earnings were 40 cents per share, above the 37 cents that analysts were expecting, according to Thomson Reuters I/B/E/S.
Revenue rose 1 percent to $2.25 billion, above the $2.18 billion that analysts expected. Revenue in the marketplaces segment rose 3 percent to $1.41 billion, while revenue in payments, which includes PayPal, rose 22 percent.
Gross merchandise volume excluding vehicles — which measures the total value of goods sold on eBay — rose 3 percent in the quarter. Shares rose to $27.50 after closing at $25.66 on the Nasdaq.
