eBay Earnings: Twofold Profit JUMP, Beats Wall Street

S&P 500 (NYSE:SPY) component eBay Inc. (NASDAQ:EBAY) reported net income above Wall Street’s expectations for the second quarter. eBay is an Internet company that, together with its subsidiaries, provides online marketplaces for the sale of goods and services. It also provides other online commerce platforms, online payment solutions, and communication offerings to a diverse community of individuals and businesses.

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eBay Inc. Earnings Cheat Sheet

Results: Net income for the internet commerce rose to $692 million (53 cents per share) vs. $283.4 million (22 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year-earlier quarter.

Revenue: Rose 23.1% to $3.4 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: eBay Inc. beat the mean analyst estimate of 48 cents per share. Analysts were expecting revenue of $3.36 billion.

Quoting Management: “We delivered a great second quarter, driven by eBay Marketplaces’ best performance in years, strong growth at PayPal and strong same-store-sales growth for GSI’s large retail customers,” said John Donahoe, eBay Inc. President and CEO. “Our entire company is strong, but we’re particularly pleased with eBay Marketplaces, which delivered its strongest organic growth in gross merchandise volume, excluding vehicles, since 2006. And mobile continues to be a game changer. We now expect eBay and PayPal mobile to each transact $10 billion in volume in 2012 – that’s more than double 2011, a staggering surge in mobile shopping and payments on devices that did not exist just a few years ago. Retail is at an inflection point, and we are helping to reshape how people around the world shop and pay.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 28.7%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 35.5% from the year earlier quarter.

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell one percentage points from the year-earlier quarter to 71%. In that span, margins have contracted an average of 1.5 percentage points per quarter on a year-over-year basis.

The company has now seen its net income rise for three quarters in a row. In the first quarter, net income rose 19.8% and in the fourth quarter of the last fiscal year, the figure rose more than threefold.

The company has beaten estiamtes for two quarters in a row. In the first quarter, it topped expectations with net income of 48 cents versus a mean estimate of net income of 43 cents per share.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the third quarter is 47 cents per share, up from 46 cents ninety days ago. Over the past three months, the average estimate for the fiscal year has climbed from $1.97 per to share to $2.05.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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