eBay's revenue declined for the third consecutive quarter, but experts say the company's financial outlook may be stabilizing.
The auction giant reported $2.1 billion in revenue for the second quarter of 2009. That's down 4 percent from a year ago, but the results are better than even eBay expected. In April, the company projected its second-quarter revenue to come in between $1.85 billion and $2.05 billion. Wall Street analysts had expected to see revenue drop 9 percent.
Last quarter, eBay reported a revenue decline of 8 percent to $2.02 billion.
"We drove solid second-quarter results, with strong momentum and market share gains at PayPal and continued stabilizing in our core eBay business," notes eBay's CEO John Donahoe. "We are managing our business with focus and discipline, delivering on our commitment while investing in our growth priorities. I'm pleased with our peace, our progress and our performance."
eBay's net income declined by 29 percent to $327 million. But its stock value rose 3.3 percent on the news of higher-than-expected revenue.
"eBay [has] been trying all kinds of things to reignite the core marketplaces business," Jeff Lindsay, an analyst for Stanford C. Bernstein, tells Bloomberg. "They're having a degree of success, but it's probably going to take another 12 months to get that business where they want it to be."
Amazon will release its second-quarter numbers tomorrow. It, too, is expected to show a decline.
eBay reports that PayPal revenue increased by 11 percent to $669.3 million and registered accounts increased by 12 percent. Revenue from Skype increased by 25 percent to $170 million.
"We like the earnings," Sandeep Aggarwal, an analyst at Collins Stewart, tells reporters. eBay continues to be the most popular shopping site online, according to comScore, with 71 million unique visitors in June.
eBay's Marketplaces unit, which includes eBay.com, Shopping.com, StubHub, Kijiji and others, posted $12.6 billion in revenue, a 14 percent year-over-year drop.
eBay expects to generate net revenue of between $2.05 billion and $2.15 billion during the third quarter.
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Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.