EBay Inc forecast 2010 results above expectations after posting double-digit revenue growth in PayPal and its main online marketplaces unit, sending shares up 8%.
The company, which is in the midst of a turnaround as it battles Amazon.com and other retailers like acne products, also beat Wall Street profit estimates in its closely scrutinized holiday quarter.
EBay, which connects buyers and sellers over the Internet, has been overhauling its main marketplaces division to increase transactions on its site. Revenue rose 15% at that unit during the quarter.
Gross merchandise volume, which measures the total value of goods sold on eBay, rose 24%. That marked a huge improvement over the negative trends seen earlier in 2009.
EBay said it expects full-year 2010 adjusted earnings of $1.63 to $1.68 per share on revenue of $8.8 billion to $9.1 billion. That was above the $1.60 per share expected, on average, by Wall Street analysts.
“It’s fair to say a turnaround is taking shape,” said Morningstar analyst Larry Witt, calling the results the best in at least a year. “You’re going to see more of the same (in 2010).”
“Pay Pal is hitting the ball out of the park,” he added.
That fast-growing Web payments unit, which represents more than a third of overall revenue, saw a 28% revenue rise during the quarter.
Gains in marketplaces, which includes Shopping.com, StubHub and other e-commerce units, were driven by more sold items and more goods purchased for fixed prices, rather than in an auction format.
The company has sought to increase selection, enhance security and make it easier to buyers and sellers to conduct transactions on the site. A lower tax rate and a stronger US dollar also helped results in the quarter.
