EBay has posted solid quarterly results, leading to hope among investors that there’s better days ahead for the auction site.
During its second quarter profits hit $327.3 million, down from $460 million a year ago. Revenue was down 4% to $2.1 billion, though the marketplace division was bailed out by the fast-growing PayPal service which increased revenues by 11%.
PayPal accounted for nearly a third of total sales during eBay’s second quarter.
Chief executive John Donahoe claimed the company was aggressively trying to turn itself around and noted that gross merchandise volume figures improved for the first time in seven quarters, as more items moved.
“Our core marketplaces business is stabilising with the economy as we execute against our turnaround priorities,” he says.
Still, he cautioned that it was too soon to declare victory and the planned three-year turnaround of marketplaces would be a “process of steady, consistent progress.”
Pacific Crest analyst Steve Weinstein did not see a quick return to true growth: “You can say they’re not in this steep nosedive any more but it doesn’t look to me like they’ve really addressed the issues to get growth,” Weinstein says. “When I look at the quarter, they beat a little bit, but if I back out Gmarket and the favorable switch in currency – not really.”
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