eBay, operator of the worlds largest online marketplace, surged to an eight-year high after fourth-quarter revenue topped analysts estimates, helped by record holiday sales on the web and mobile devices.
The results suggest Chief Executive Officer John Donahoe is sustaining a turnaround effort that began in March 2008, when he succeeded Meg Whitman. The company has been pushing to generate more revenue from consumers shopping on tablets and smartphones, and from retailers that use eBay to sell their merchandise. That has resulted in 14 straight quarters of sales growth, and a 75% rally in the shares since Donahoe took the helm.
The legacy marketplaces business — its kind of carried into mobile, says Bill Smead, chief investment officer of Smead Capital Management. You get involved with bidding or selling something on eBay, and its nice to carry around the device where youre doing that with you.
On Cyber Monday in November, at the beginning of last years holiday shopping season, transactions on eBays mobile applications more than doubled from the year before, while PayPal mobile-payment volume almost tripled.
PayPals sales rose 24% to $1.54 billion, and active accounts increased 15% to 123 million. Revenue in the marketplaces division rose 16% to $2.05 billion, while the value of US sales on eBay, excluding cars, trucks and other vehicles, rose 19%. US sales volume not coming from eBay Motors is the metric everyone focuses on, Gil Luria, an analyst at Wedbush Securities said. Its the best indication of the health of the core business in the US
Donahoe said hes continuing his efforts to make sure users are buying on smartphones and tablets as well as eBays website. Mobile users tend to complete purchases more often than those browsing on desktop computers, and mobile garners a quarter of new customers, drawing a younger demographic to the site, he said. eBays acquisition of credit-card scanning company Card.io last year will further that goal, because the technology makes it easier for new users to sign up, he said.
Picture by the end of this year, you download the eBay or PayPal mobile app, you take a picture of your drivers license, and you take a picture of your credit card, and thats registering, Donahoe said.
eBays mobile payment volume reached $13 billion last year, while PayPals total was $14 billion – exceeding eBays own projections of $10 billion for each.
Q1 revenue will be $3.65 billion to $3.75 billion, eBay said, compared with an average analyst projection of $3.8 billion. The company forecast profit, excluding some items, of $0.60 to $0.62 a share, versus a $0.64 estimate. eBays mobile payment volume will exceed $20 billion in 2013, as will PayPals, the company said.