eBay’s higher-than-expected quarterly profit was boosted by revenue from its payments businesses, including PayPal, which will be spun off into an independent entity later this year.
Revenue from eBay’s payments business rose 14 per cent to $2.11 billion in the first quarter of this year, Reuters reported, accounting for nearly half of the e-commerce company’s total revenue.
Ebay’s e-commerce marketplace ebay.com is facing increasing competition and slowing customer additions, which has led to a 4 per cent fall in quarterly revenue.
PayPal, which will act as an independent entity for the next five years after it is spun off from its parent company later this year, has benefitted from a surge in mobile payments. Mobile phones and tablets now account for nearly one-third of PayPal’s transactions, having grown by more than 40 per cent.
The payments processor will continue charging eBay merchants less than it does other merchants after it is spun off.
eBay forecast a lower revenue that the average analyst estimate of $4.57 billion, at $4.40 billion-$4.50 billion.
The e-commerce company’s full-year revenue forecast of $18.35-$18.85 also missed analyst expectations. EBay blamed this on this strength of the dollar, which will be felt most in its marketplace business.
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