eBay Beats Earnings Estimates

By Kapitall | April 19, 2012 AAA


Written by Rebecca Lipman

Online retailer eBay (Nasdaq:EBAY) beat analysts' expectations on Wednesday after reporting sales and profits above expectations led by growth in its Pay-Pal online payments business.

Shares rose more than 6.6% in after-hour trading after falling 0.58% on Wednesday.

First-quarter revenue increased 29% to $3.28 billion. That beat Bloomberg's average analyst estimate of $3.2 billion. "Profit excluding some items was 55 cents a share, compared with the average 52-cent prediction." (via Bloomberg)

PayPal's revenue increased 32% and volume increased 24% in the first quarter. It accounted for 43% of last year's sales. eBay says it is expanding beyond its online auction site into mobile shopping on smartphone and tablets. The company projects mobile-payment volume will increase 75% and add $7 billion in revenue.

"We see enormous opportunity for PayPal, online, on mobile devices and increasingly in the offline environment as well," eBay's CEO, John Donahoe said in a conference call with analysts.

Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:



Business Section: Investing Ideas
Is mobile payment the next big market to take off?

For a look into the market we created a list of companies with exposure to the mobile payment industry. Think it will help to notably boost revenues? (Click here to access free, interactive tools to analyze these ideas.)

1. Amazon.com Inc. (Nasdaq:AMZN): Operates as an online retailer in North America and internationally. It has a market cap of $86.95B. The stock has gained 7.14% over the last year.

2. American Express Company (NYSE:AXP): Provides charge and credit payment card products, and travel-related services worldwide. It has a market cap of $67.70B. The stock has gained 27.9% over the last year.

3. Discover Financial Services (NYSE:DFS): Operates as a credit card issuer and electronic payment services company primarily in the United States. It has a market cap of $17.31B. It might be undervalued at current levels, with a PEG ratio at 0.79, and P/FCF ratio at 5.61. The stock has gained 38.58% over the last year.

4. eBay Inc. (Nasdaq:EBAY): Provides online marketplaces for the sale of goods and services, as well as other online commerce, platforms and online payment solutions to individuals and businesses in the United States and internationally. It has a market cap of $46.28B. The stock has gained 15.15% over the last year.

5. Mastercard Incorporated (NYSE:MA): Provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers' check programs. It has a market cap of $55.25B. The stock has gained 65.1% over the last year.

6. VeriFone Systems, Inc (NYSE:PAY): Designs, markets and services electronic payment solutions that enable secure electronic payments among consumers, merchants and financial institutions worldwide. It has a market cap of $5.79B. The stock is a short squeeze candidate, with a short float at 10.54% (equivalent to 5.1 days of average volume). The stock has gained 4.15% over the last year.

7. Visa, Inc. (NYSE:V): Operates retail electronic payments network worldwide. It has a market cap of $99.04B. It has a relatively low correlation to the market (beta = 0.75), which may be appealing to risk averse investors. The stock has gained 62.18% over the last year.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.

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