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Q4 Shows eBay is Still Going Strong

Holiday sales boost numbers, but continued growth is expected.

A strong holiday season helped eBay sail past revenue and profit projections for the fourth quarter, and company officials see that growth continuing in 2012.

Showing it remains a force in e-commerce, eBay ended the fourth quarter of 2011 with $3.4 billion in revenue, a 35-percent increase over the same period of 2010. The full year went equally well, with $11.7 billion in revenue, a 27-percent increase compared to 2010.

The company reported fourth-quarter net income on a GAAP basis of $2 billion, or $1.51 per diluted share, and non-GAAP net income of $788.6 million, or 60 cents per diluted share. For the full year, GAAP net income was $3.2 billion, or $2.46 per diluted share, and non-GAAP net income was $2.7 billion, or $2.03 per diluted share.

“We had a strong close to a great year, and are well-positioned to capitalize on the opportunities ahead,” said eBay CFO Bob Swan in a teleconference with analysts.
“We are a different eBay today, no longer just an e-commerce leader but a stronger, more diverse global commerce company shaping the future of shopping and payments”

As has come to be expected, payments subsidiary PayPal contributed significantly to eBay’s growth. PayPal’s quarter ended with a 28-percent increase in revenue year over year. The growth is a result of continued merchant and consumer adoption, eBay says. PayPal also ended the quarter with 106.3 million active registered accounts, up 13 percent year over year.

During the quarter, revenue from PayPal’s international markets exceeded revenue from the U.S. for the first time, eBay notes. Its mobile payment volume also climbed to $4 billion for the year, which is five times more than was reached in 2010. These growing numbers are a reflection of PayPal’s expansion, not just on a global scale, but also to reach users through new technologies like smartphones and tablets, according to eBay.

eBay Marketplaces fourth-quarter revenue grew 16 percent year over year, tracking in line with overall e-commerce growth. Gross Merchandise Volume grew 10 percent—excluding vehicles—with sold items up 11 percent globally year over year. The company also acquired e-commerce platform GSI in the second quarter, which brought in $363.6 million revenue for the fourth quarter.

During the conference call, John Donahoe, eBay Inc. President and CEO, spoke of a “growing opportunity to be the technology platform for enabling commerce.”

“We are a different eBay today, no longer just an e-commerce leader but a stronger, more diverse global commerce company shaping the future of shopping and payments.”

For the coming fiscal year, eBay projects growth of 18 percent to 20 percent with $13.7 billion to $14 billion in revenue. Read eBay’s full fourth-quarter results here.

About the author

Sarah Brown
Sarah Brown is a freelance writer who writes about e-commerce and small businesses. She recently graduated from Chico State with a journalism degree and is also a budding online entrepreneur, having launched two Web businesses and her own line of handmade products. Opinions expressed here may not be shared by The Online Seller and/or its principals.



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