Ebay Results Better Than Expected

Ebay, Inc announced its quarterly profit and sales increased more than had been expected. That prompted the company to raise its forecast for 2012, citing more growth in the PayPal and Marketplaces businesses.

Ebay shares increased nearly 7% in extended trading, following the company’s announcement of earnings. Shares reached $38.83, the highest the stock has been since late in 2007. During 2012, the stock has increased in value by 15%; more than double that of e-commerce rival Amazon.

Ebay’s marketplaces online during the first three months of the year increased active users, while mobile device transactions spiked and sales of auto parts, fashion and accessories were strong.

PayPal’s sales were strong as more businesses added the payment option, particularly mobile sites. Both Marketplaces and PayPal were strong during the quarter and often times that does not happen for both sectors. That therefore suggests the strategy of management to turnaround its Marketplaces online while expanding its PayPal presence has worked.

Ebay has the world’s largest online marketplaces, but they have lagged in the area of growth to Amazon.com and e-commerce for a number of years and active online users in marketplace increased by two million during the first three months of 2012. That increase said CEO John Donahoe was the most of any quarter in the past three years.

Total payment volume for PayPal in the first quarter was $34 billion, a 24% increase from the same quarter last year. First quarter profit for eBay was $725 million or $0.55 a share compared to $619 million or $0.47 a share in the same quarter a year ago.