SAN FRANCISCO — The turbulent economy battered eBay, and the online marketplace reported its profit fell 31 percent and that it had its first revenue decline since it started in 1995.
The results cap a year in which eBay made considerable efforts to reduce its dependence on its auction business, where growth has slowed in favor of fixed-price sales and eBay’s noncore businesses, like its PayPal payment-processing unit.
“This was eBay’s first year-over-year quarterly decline, and we’re not happy about that," said John J. Donahoe, eBay’s president and chief executive in a conference call with analysts. “There’s no doubt eBay was impacted by the macroeconomy, and our fourth-quarter results reflect this.”
The report caused shares of eBay to decline more than 6 percent in after-hours trading, after closing up 73 cents a share, or nearly 6 percent, at $13.28 in regular trading before the report was released.
Adding to the disappointment, eBay warned that its first-quarter income would also fall short of Wall Street’s expectations. For the fiscal 2009 first quarter, eBay expects income, excluding items, of 32 to 34 cents a share on revenue of $1.8 billion to $2.05 billion. Analysts had forecast income of 40 cents on revenue of $2.10 billion.
EBay’s net income in the fourth quarter fell to $367 million, or 29 cents a share, from $530.9 million or 39 cents a share in the year-ago quarter. EBay’s full-year revenue of $8.54 billion was up 11 percent over 2007.
Both Google and Apple had relatively good earnings despite the poor economic environment. Microsoft and Ebay were not quite as lucky. Ebay is facing a lot of competition with Amazon I think. Ebay has pretty much stayed the same without innovation for 5+ years now.
Google and Apple are still great buys. I Like Microsoft after the recent price haircut too. Remember though this is a chaotic market, so be careful. If you have money you don't need for 5+ years then in my opinion its a good time to begin to enter the market. By "begin" I mean, slowly invest in 10% chunks every 2 weeks for the next 20 weeks. Just my opinion
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EBay’s Income Declines 31%
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