eBay net profit down 22 pct
US online auction giant eBay reported a 22-percent drop in quarterly net profit on Wednesday despite improved results from online payment service PayPal and Internet communications firm Skype.
The San Jose, California-based eBay said net profit fell to 357.1 million dollars in the quarter while revenue declined by 171.6 million dollars from the same quarter last year to 2.02 billion dollars.
Earnings per share of 39 cents were better than the 34 cents per share expected by Wall Street analysts and the 32-34 cents per share forecast by eBay in January.
"We delivered solid results in the first quarter and moved aggressively to strengthen our portfolio for longer-term growth," eBay president and chief executive John Donahoe said in a statement.
"With a macroeconomic environment that remains challenging, we are focused on operating discipline and strong execution of our three-year growth priorities in our core ecommerce and online payments businesses," he said.
EBay said revenue fell 18 percent cent at its core "Marketplaces" business unit which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites to 1.22 billion dollars.
"The revenue drop was attributable to the impact of the strengthening dollar and the decline of the core business in difficult macroeconomic conditions," it said.
Revenue from Skype, which eBay plans to spin off through an initial public offering next year and make an independent company, grew 21 percent to 153.2 million dollars, eBay said.
EBay announced last week that it planned to spin off Skype, which it purchased in 2005 for 2.6 billion dollars, with an IPO to be completed in the first half of 2010.
Announcing the move, CEO Donahoe said "Skype has limited synergies with eBay and PayPal" and spinning off the company would allow eBay to focus on its core online auction and payments business.
On Wednesday, it said Skype added 37.9 million new users in the quarter and now has more than 443.2 million registered users.
EBay said its "Payments" business unit, which includes PayPal and Bill Me Later, saw revenue increase by 11 percent to 643 million dollars. The number of active registered accounts increased by 22 percent to 73.1 million.
It also expected revenue of 1.85 billion dollars to 2.05 billion dollars in the second quarter and earnings per share of between 34 cents and 36 cents.
The firm gained 5.62 percent to 15.61 dollars in after-hours electronic trading in New York following the release of its results.