By Angela Chen
EBay Inc. reported Thursday that revenue grew 7% in the June
quarter, its last that includes results from its PayPal division
before the two businesses split.
Shares of eBay rose 3.6% in premarket trading as adjusted
earnings beat Wall Street expectations and the company also added
$1 billion to its stock-buyback authorization.
The eBay-PayPal split is expected to happen July 17. EBay on
Thursday gave yearly forecasts for the two business after the
split. EBay expects revenue to grow 3% to 5% adjusted for currency
impacts, with adjusted earnings per share falling in the range of
$1.72 to $1.77.
For PayPal, it sees revenue growing 15% to 18% on a
currency-neutral basis and EPS of $1.23 to $1.27.
The company also confirmed plans to sell its eBay Enterprise
unit to a group led by private-equity firm Permira for $925
million. The Wall Street Journal had reported the deal was near on
Wednesday night.
Due to the sale of Enterprise, the results of that segment are
presented as discontinued in the latest quarter, and eBay recorded
an Enterprise goodwill impairment of about $786 million.
Overall, eBay posted earnings of $83 million, or seven cents a
share, compared with a year-earlier profit of $676 million, or 53
cents a share. Excluding items such as the impairment charge,
per-share earnings were 76 cents, up from 70 cents.
Revenue rose to $4.38 billion from $4.1 billion.
Analysts had expected per-share earnings of 72 cents on revenue
of $4.49 billion, according to Thomson Reuters.
In the second quarter, PayPal's revenue grew 16% to $2.26
billion, while net total payment value rose 20% to $66 billion,
with merchant services volume up 27%. Payment volume through eBay
Marketplaces was $14.5 billion.
Revenue at eBay's core marketplace was $2.12 billion, down from
$2.18 billion a year earlier, though it would have improved 5% if
adjusted for currency fluctuations.
EBay said its number of active buyers grew 6% in the
quarter.
In a June filing, eBay had said it expected revenue from its
marketplace division--which will comprise the new eBay after the
spinoff of its PayPal payments unit--will remain flat or grow as
much as 5% next year, not including the impact of foreign exchange
fluctuations.
The now-sold Enterprise unit had suffered a blow last week when
Toys "R" Us Inc., one of its larger customers, said it would take
its U.S. business in-house by mid-2016. As the PayPal spinoff
nears, eBay has been cleaning house in other ways. In June, it sold
back to Craigslist Inc. a 28.4% stake it had held in the
classified-ad site since 2004 for an undisclosed amount, while also
settling remaining litigation.
It also said in January it planned to cut 2,400 jobs ahead of
the split with PayPal.
Write to Angela Chen at angela.chen@dowjones.com
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