EBay Inc has posted an increase of 13% in its quarterly revenue as results that were better than expected from its PayPal division that is fast growing, helped the retailer overcome an increase in competition from Amazon.com as well as a cyber attack that had been well publicized.
Investors were bracing for a difficult quarter, as stock at eBay has dropped over 8% since April. Shares have been hurt by a cyber attack that was disclosed this past May that compromised data of more than 145 million clients, the departure of David Marcus the CEO at PayPal who was highly regarded and an increase in competition from both offline and online rivals.
EBay has also been hurt due to a change in the algorithm at Google, which pushed the results of eBay lower in its search rankings resulting in slower traffic.
The CFO at eBay, Bob Swan said the first six months of 2014 were challenging. He noted that the Google changes in the search engine and the cyber attack had dramatic and immediate impact.
Executives said the online retailer would spend more on ways to entice back users, including seller incentives, increased marketing and coupons.
A number of investment brokerages downgraded forecasts prior to the results from Wednesday. The results from the second quarter and the revenue outlook at eBay were in line with the tempered expectations.
Quarterly revenue was up to $4.37 billion, compared to $3.88 billion during the same period one year ago. Revenue forecasted by Wall Street was $4.38 billion.
Payment volume was up by 29%, which was much better than expected. Gross merchandise value was up 12%, which was inline and even slightly better than forecasts from analysts.
Stiffening competition will remain a fight with eBay moving forward across all of its businesses.
Retailers that are brick and mortar have invested to increase their presence online. EBay has also had to fend off a coterie of retail upstarts that are focusing on specific categories like apparel and home.
