EBay’s results were strong in the third quarter. EBay reported that net income rose $597 million, or $0.45 a share. This was a 22% increase from the same quarter a year earlier. The company’s operating profit margin increased to 19.6%, up from 18.1 percent in the same period last year.
EBay’s stock is up 54% for the year, more than the 37% gain of its main rival, Amazon. Colin Gillis, an analyst with brokerage firm BCG Partners, said. “That’s a significant run. The core story behind eBay is that they are doing all the right things.”
John J. Donahoe, eBay’s chief executive, credited the company’s performance in part to an early bet that mobile phones would become a platform for commerce. Mr. Donahoe said, “We’re the largest mobile commerce and payments provider in the world and we are continuing to innovate. We have a series of innovative apps that people are using. People love shopping on their smartphones and iPad, and PayPal is still the safest way to pay on a mobile phone.” PayPal is providing the lead in mobile payments.
EBay has continued its successful turnaround. EBay’s Marketplaces, the company’s biggest business, earned $1.8 billion in revenue last quarter. This was an increase of 9% from a year ago. PayPal, its online payments system, has seen double-digit growth. PayPal brought in $1.37 billion in revenue last quarter. This was a 23% jump from the same quarter a year ago.
PayPal is expected to eventually surpass Marketplaces in revenue. Mr. Donahoe said, “If you do the math, that will be three to five years out if current trends continue.” The company expects each business to achieve $10 billion in volume in 2012. This would be more than double the volume in 2011.
EBay sellers are now posting two million items a week from their smartphones. Worldwide, eBay’s mobile apps have been downloaded more than 100 million times. Over 800,000 new users made their first eBay purchase from a smartphone last quarter. EBay’s new mobile app, called eBay Now, which allows eBay customers to buy products with their phones from Macy’s, Target, and Walgreens and have them delivered the same day, is currently being tested by consumers in San Francisco.