Technology

The business and culture of our digital lives,
from the L.A. Times

« Previous Post | Technology Home | Next Post »

EBay posts third-quarter profit, warns about year ahead

October 15, 2008 |  2:16 pm

EBay CEO John Donahoe

EBay Inc. posted a third-quarter profit today that beat analysts' forecasts. The online auction giant reversed a loss from the same period a year earlier, when it took a big charge stemming from its acquisition of telecommunications company Skype.

EBay earned $492 million, or 38 cents a share, compared with a loss of $936 million, or 69 cents a share, a year earlier, when it took a $1.4-billion write-down for Skype. Excluding certain items, EBay said it would have made $592 million, or 46 cents a share, in the quarter. Analysts were expecting 41 cents a share.

Revenue grew 12% to $2.12 billion, a bit lower than anticipated. Analysts were expecting revenue of $2.13 billion.

But EBay warned that its full-year revenue would fall below its previous forecast as the company attempts to revive growth in its online auction business.

Shares fell 14% in regular trading to $15.33 on fears that the deepening recession would hammer EBay's online auction business. Similar concerns hit online retailer Amazon.com Inc., which fell 13% to $48.72.

EBay's stock has sold off sharply in recent months. The San Jose company is in the midst of an overhaul. Last week EBay warned that third-quarter revenue would be at the low end of a previous forecast of $2.1 billion to $2.15 billion and that it planned to cut 10% of its staff.

"We believe that macro weakness will continue to crimp consumer demand," Youssef Squali of Jefferies & Co. wrote in a research note Tuesday.

Chief Executive John Donahoe is trying to shake up the business to catch up with rival Amazon.com, sometimes making moves that have riled online sellers.

He said today that he was overall pleased with EBay's performance in light of the "very challenging external environment" that he expects to continue into the fourth quarter and beyond. "These are turbulent times for which no one has the perfect playbook," he said. He also said turmoil in the markets was having an effect on consumer spending and that EBay was feeling "that impact across all of our platforms."

-- Jessica Guynn

Photo: EBay CEO John Donahoe. Credit: Saul Loeb / AFP/Getty Images