Pressure on eBay continues as earnings drop 29pc in Q3

22 Oct 2009

Online auction giant eBay has reported a 29pc drop in net earnings for the third quarter of the year as the company’s profits remain under pressure.

eBay made US$350 million in the third quarter, compared to the US$492 million earned during the same quarter the previous year.

However, despite the fall in profits, third-quarter revenue at the internet firm was up 6pc from the same period last year to US$2.2 billion.

Revenue growth

The year-over-year revenue growth was driven primarily by the continued growth in PayPal, Skype, the company’s classifieds business, as well as growth in eBay’s fixed-price format, the company said.

eBay’s payments business unit reported a strong quarter with US$688.1m in revenue, an increase of 15pc year-over-year. Much of the growth was driven by continued consumer and merchant adoption of PayPal, the company said.

Revenue at the group’s Skype division grew 29pc over the year during the third quarter to US$185.2m. The division added 40.3 million extra users during the quarter to end the period with more than 520.8 million registered users, eBay said.

‘Strong’ results

“Our third-quarter results were strong with PayPal gaining momentum and market share worldwide and our core eBay business showing positive trends,” said eBay Inc President and CEO John Donahoe.

eBay said it expects net revenues for the fourth quarter in the range of US$2.20 billion – US$2.30 billion with earnings per diluted share in the range of US$0.28 – US$0.30.

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Photo: eBay Inc President and CEO John Donahoe.