SEATTLE, United States — EBay Inc.’s third-quarter profit and sales topped analysts’ estimates as more people used the online marketplace to buy and sell goods, putting the company on solid ground after its recent split from PayPal.
Profit was 43 cents a share on revenue of $2.10 billion, compared with analysts’ average projection for 40 cents and $2.09 billion, according to data compiled by Bloomberg, showing that EBay is recovering from a data breach and Google Inc. search-engine changes last year that hurt e-commerce traffic. Sales were $2.15 billion in the same period a year earlier, excluding PayPal Holdings Inc.
The goal of July’s split was to make sure that each company could focus on their main businesses. EBay is facing especially fierce competition from Amazon.com Inc., Wal-Mart Stores Inc. and other retailers ahead of the year-end holiday shopping season. The challenge for Chief Executive Officer Devin Wenig is to catch up with industry’s growth rate; U.S. e-commerce sales are projected to hit $79.4 billion in November and December, up 14 percent from a year earlier, according to EMarketer.
"There’s an expectation that they will have turned the corner because the password breach and Google algorithm change were last year," said Gil Luria, an analyst at Wedbush Securities Inc.
Shares of EBay rose as much as 11 percent in extended trading. The stock, which declined less than 1 percent to $24.21 at the close in New York, is down 13 percent since the split was completed July 20.
EBay, which attracts 159 million buyers and had $19.6 billion in gross merchandise volume in the latest quarter, has been taking steps to streamline itself and boost its appeal to merchants. The company also killed its U.S. same-day delivery service EBay Now and struck a deal to sell its enterprise unit, which provided warehousing, delivery and customer support for web merchants, for $925 million to a private equity group.
Wenig is also implementing changes to EBay’s seller-rating system so that merchants aren’t penalized for late shipments beyond their control or routine returns and exchanges. This is aimed at growing EBay’s base of 25 million merchants and keep them from shifting inventory to competing sites such as Amazon and Etsy Inc.
By Spencer Soper; editors: Jillian Ward, Reed Stevenson, Andrew Pollack.