Online auction pioneer eBay Inc. reported a 40 percent surge in third-quarter income, but warned of a reduced profit in the current quarter as it pays for recent acquisitions.
SAN JOSE, Calif. — Online auction pioneer eBay Inc. reported a 40 percent surge in third-quarter income, but warned of a reduced profit in the current quarter as it pays for recent acquisitions. Company shares fell 5.7 percent in late trading.
For the fourth quarter, eBay said it now expects earnings of 21 cents a share — 1 cent below the current Wall Street estimate — on revenue of $1.25 billion to $1.29 billion, reflecting the impact of its acquisition of Internet phone provider Skype Technologies SA and the pending $370 million purchase of an online payment business from Internet services company VeriSign Inc.
In the third-quarter, San Jose-based eBay said it earned $255 million, or 18 cents per share, for the three months ended Sept. 30, compared with $182.3 million, or 13 cents per share from the year-ago period.
If not for one-time items, eBay said it would have earned $280.2 million, or 20 cents per share, matching analysts earnings-per-share expectations, according to Thomson Financial.
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Revenue for the period totaled $1.106 billion, a 37 percent increase from last year’s $805.9 million. Analysts were expecting revenue of $1.08 billion, according to Thomson.
The Internet bellwether released the results after the stock market closed Wednesday. The company’s shares rose $1.59 to close at $42.01 on the Nasdaq Stock Market, and fell $2.39, or 5.7 percent, in extended trading.
For the full year, the company said it expects revenues to be between $4.47 billion to $4.51 billion, compared to analysts’ forecasts of $4.43 billion.
Ebay, the leading e-commerce player, has been battling skepticism about its acquisition of Skype Technologies. Many analysts have questioned both the price tag — at least $2.6 billion — and the companies’ compatibility.
Ebay said Wednesday that Chief Financial Officer Rajiv Dutta will become Skype’s president, after his successor is named. Dutta will remain a member of eBay’s executive team, the company said.
In a conference call with analysts, eBay CEO Meg Whitman defended the Skype purchase, saying the merger will help eBay expand its existing services and reach more users. For one, Skype users will be able to pay their bills automatically via PayPal, eBay’s online payment business, Whitman said.
Privately held Skype — founded by the creators of Kazaa, the file-sharing program that riled the music business — gives away software that lets people talk for free over the Internet using computers and microphones. A paid version, SkypeOut, allows those calls to be connected to regular phones.
In a phone interview, Dutta refused to elaborate on new services that would come from the merger. “But certainly, Skype is an opportunity that is truly transformational for eBay, much as PayPal was a few years ago.”
Ebay said it had more than 168 million registered users by the end of the third quarter, a jump of 35 percent from last year.
PayPal, a main revenue source for eBay, posted a total of 86.6 million accounts in the third quarter, up 53 percent from the year-ago period. The division achieved a record $6.7 billion in sales in the quarter.
Ebay’s other key measures, including active users and the amount of merchandise bought on its site, also increased by hefty amounts from last year.