Earnings: PayPal Is Booming, But eBay’s Q3 Profits Still Drop 29 Percent
*EBay* said a robust PayPal business and moderate rise in consumer spending helped it make more money in Q3, with net revenue up 6 percent year-over-year. The uptick in sales didn’t translate to increased profits, however, as the company’s net income was down 29 percent vs. Q208; an EPS of just 27-cents per share. eBay (NSDQ: EBAY) attributed the drop in profits to a variety of factors, including its acquisition of payment platform Bill Me Later, and the weaker U.S. dollar.
The report sent shares down by about five percent in after-hours trading, though the stock has since rebounded slightly. Analysts like Broadpoint AmTech’s Ben Schacter were expecting a profit of about 36-cents per share.
| 3Q 2008 | 3Q 2009 | Estimate | |
|---|---|---|---|
| EPS | $0.38 | $0.27 | $0.36 |
| Net Income | $492M | $350M | |
| Revenue | $2.1B | $2.2B |
– Skype: Its contested $1.9 billion deal to sell the VoIP-provider aside, Skype’s Q3 revenues came in at $185.2 million, up 29 percent year-over-year. The company said it still expects the deal to close in Q4.
— Payments business: Revenues from eBay’s Payments division came in at $688 million, up 15 percent vs. Q308. Just over $17.7 billion dollars worth of payments crossed its network this quarter, up 19 percent year-over-year. The company said the growth was driven by increased usage of PayPal by both consumers and merchants, with active registered accounts also up 19 percent.
Well if you follow the forums, load and loads of ebay affiliates are jumping ship (as they reduce payouts), while this helps ebays bottom line for a quater or two, expect a massive drop in ebay traffic, and revenue shortly…. while amazon should expect ever more traffic.