eBay Delivers Strong Guidance, And The Stock Lifts In After Hours Trading

John Donahoe

Ebay turned in earnings earlier tonight, and investors liked what they saw.

The company missed on the top line, but came in strong on the bottom line.

Guidance was better than expected, too.

The stock lifted a little in the after hours.

Here’s a note from Imran Khan at JP Morgan on the quarter:

Non-vehicles US GMV up 5% Y/Y. Our incoming model called for a 2% increase, and while the outperformance is a positive, we believe the relatively tepid growth suggests eBay continues to lose market share in the US.

Non-vehicles Int’l GMV up 9% ex-FX. Our forecast was for an 8% Y/Y improvement, in line with 3Q performance. As such, it does not appear the Marketplaces business is experiencing much acceleration internationally.

Marketplaces take rate in-line. The take rate was 7.4%; our forecast was for a 7.7% take rate, compared to 7.5% in the year-ago quarter and 8.0% in 3Q.

PayPal TPV up 26% Y/Y; better than expected. We had modelled a 23% Y/Y improvement. On-eBay TPV was 70.0% of addressable GMV, an improvement from 69.8% in 3Q. Merchant Services TPV was up 36% Y/Y (or 38% ex FX).

PayPal take rate a little low at 3.45%. We had modelled 3.57%, and 3Q saw the take rate at 3.57%. PayPal revenue margin was 63.8%, vs. 62.2% last quarter.

Revenue $2.50B. This compares to our $2.54B estimate and the top end of guidance at $2.49B.

Pro forma EPS of $0.52. We had modelled $0.45; the high end of guidance was $0.48. Consensus was at $0.47. EPS had a one-time net event benefit of $0.02.

1Q outlook implies rev. growth of 9% to 14%. Our estimate was for 13% growth. The company sees 1Q revenue of $2.4B-$2.5B, and pro forma EPS of $0.44-$0.46, compared to consensus of $0.45 and our estimate of $0.43.

Full year guidance provided. The company guided for 2011 revenue in the range of $10.3B-$10.6B and pro forma EPS of $1.90-$1.95 vs. our estimates of $10.3B and $1.82. Consensus is at $10.2B and $1.86, respectively.

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