Earnings: EBay Swings To Black For Q3 But Growth Is Oh So Slow

EBay moved into the black for Q3 but will it be there this time next year? The e-commerce company reported third-quarter net income of $492 million after charges, or $0.38 per share, up from a loss of $.69 in the same quarter last year. (Q307 included the massive $1.43 billion writedown for Skype.) Revenue rose $228 million to $2.12 billion, up 12 percent over $1.9 billion in Q307. But the economic downturn combined with eBay’s (NSDQ: EBAY) slowing growth — almost stagnant — doesn’t bode well; that year-over-year revenue increase is actually down $769 million from last quarter and eBay’s increases for the last three quarters were incremental, with a range of $15 million. Q4 will include $70-80 million in charges from the recently announced 10 percent job cuts. The result: eBay would consider zero revenue growth over this quarter to be a win.

Skype: Revenue for eBay’s communications division grew 46 percent over last year, to $143 million. A “robust trajectory” as eBay puts it but again, revenue growth is slowing. Sequentially, Skype revenue was $126 million in Q1, $136 million in Q2.

MKTW: ” Earlier this year, eBay began a restructuring effort designed to improve the buying and selling experience on its Web site. This included changes to clean up older listings and offer more items on a fixed-price basis, which has become a popular draw for competitors such as *Amazon*.com. But so far, the changes do not seem to have boosted the core business. The company said gross merchandise volume — the value of all goods sold over its auctions Web site — slipped by 1% during the quarter. GMV had grown by 14% in the previous third quarter.”

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