San Francisco - Online retailer and auction house eBay posted a 5-per-cent increase in third-quarter earnings Wednesday but said that the stalling economy would leave its annual revenue well below expectations. Following the announcement, the company's shares fell 12 per cent in extended trading.
The pioneering website reported net income of 492.2 million dollars, or 38 cents a share, compared with a loss of 935.6 million dollars, or 69 cents a share, in the same quarter a year ago, when the company took a large charge in connection with its acquisition of Skype, the online phone and text-messaging service.
EBay said that revenue climbed to 2.12 billion dollars, up 228 million dollars from a year ago, fueled largely by growth in advertising, classified ads and payment services.
For the year, eBay said it now expected revenue of 8.53 billion dollars to 8.68 billion dollars, well below its earlier forecast of 8.8 billion dollars to 9.05 billion dollars.
Gross merchandise volume, the total sum of all transactions on the eBay Marketplace and a crucial measure of growth for the company, declined 1 per cent from the year-ago period to 14.28 billion dollars.
EBay's earnings came a week after the company said it would lay off 10 per cent of its work force of 16,000, including 1,000 permanent employees, and pay a total of 1.35 billion dollars to acquire the online payment firm Bill Me Later and two Danish classified advertising companies.
"Overall, we are pleased with the performance of the portfolio this past quarter," eBay chief executive John Donahoe said in a statement. "We took a number of steps during the quarter to further strengthen our business and better align our cost structure to invest and compete."
