eBay profits hit USD725 million, boosted by Marketplaces, PayPal and GSI

Surpassing analyst expectations

eBay is reporting Q1 profits of USD725 million, up from USD619 million the previous year, driven largely by its Marketplace, PayPal and recently acquired GSI business, and easily surpassing analyst expectations. The firm also saw quarterly revenues rise 29% year on year to USD3.3 billion. The figures mark a strong quarter for eBay, despite the financial impact of recent acquisitions such as WHI Solutions in February.

PayPal saw the biggest growth during the quarter, with revenues rising 32% year on year to reach USD1.3 billion, driven by greater merchant adoption. eBay has been investing in widening its payments business, launching a Square-like mobile card reader and updating its mobile wallet offering significantly. eBay says it is expecting to process a total of USD8 billion in mobile commerce in 2012.

Marketplaces saw an improved performance, bringing in USD1.5 billion during Q1, up 2% year on year. The division has lagged behind heavyweight competitors such as Amazon in recent years, but saw gross merchandise volume sales up 13% year on year to USD6.13 billion, with CEO John Donahoe telling analysts the business had “turned the corner”.

Both PayPal and the Marketplaces were very healthy in the quarter,” says Robert W. Baird analyst Colin Sebastian, speaking to Reuters. “It’s not every quarter that you see both doing well.”

eBay’s GSI Commerce business, acquired last year to provide e-commerce tools to third-party merchants, also grew 26% year on year to bring in USD715 million in revenues.

The firm remains optimistic in its outlook, expecting revenues of between USD3.25 billion to USD3.35 billion, and full-year revenues of USD13.8 billion to USD14.1 billion.

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