eBay reported a strong financial performance for the fourth quarter with a $3.99 billion revenue, up by 18 percent, and $972 million (non-GAAP) income or $0.70 per diluted share earnings. The result exceeded analysts consensus estimates.
The stock price of eBay Inc (NASDAQ:EBAY) increased by nearly 3 percent to around $54.35 per share on Thursday morning, after the company reported a strong financial performance with an 18 percent increase in revenue for the fourth quarter.
The global e-commerce company said its revenue increased to $3.99 billion from 3.38 billion during the same period in 2011. Its net income for the three-month period, on a GAAP basis, was $751 million or $0.57 per diluted share, and its non-GAAP earnings was $972 million or $0.70 per dilute share.
eBay Inc (NASDAQ:EBAY) beat the $3.98 billion consensus estimate of Wall Street analysts and its $0.70 non-GAAP earnings per share exceeded expectations by $0.01.
According to the eBay Inc (NASDAQ:EBAY), the increase in its non-GAAP earnings were driven by double-digit growth across its portfolio, strong gains in mobile adoption and the rapid growth of its Marketplaces business, which represents a 19 percent increase in U.S. gross merchandise volume (GMV).
eBay said its full year revenue grew by 21 percent to $14.1 billion, and its net income was $2.6 billion (GAAP) or $1.99 per diluted share; non-GAAP net income was $3.1 billion or $2.36 per diluted share.
John Donahoe, president and CEO of eBay Inc (NASDAQ:EBAY) said, “We had a great finish to an excellent year, with the fourth quarter results exceeding our expectations. eBay Marketplaces in particular had a terrific fourth quarter, with growth in the U.S. accelerating three points, outpacing e-commerce.”
In addition, Donahoe said the company maintained its leadership in the mobile commerce and payments business. According to him, eBay mobile ended the year with $13 billion in volume, two times higher than the previous year and PayPal mobile delivered $14 billion in payment volume, more than triple that of last year. He projected that both businesses would exceed $20 billion each this year.
The company expects to achieve around $3.65 to $3.75 billion revenue and a net income of around $0.60 to $0.62 per share (non-GAAP) for the first quarter of 2013, while its full year estimate is around $16 to $16.5 billion in revenue and a non-GAAP net income of $2.70 to $2.75 per share.
Analysts at Benchmark said eBay’s outlook for FY2013 was better than expected. They also noted the 24% increase in PayPal’s revenue year-over-year on an FX neutral basis. PayPal’s global share at checkout increased, driving the growth of the company’s merchant services from 2% to 28%, and its active accounts climbed from 14% to 15%. The analysts believed that PayPal’s “penetration rates still have meaningful upside, and more aggressive investment.” According to them, PayPal is expected to continue to increase its global market share both online and offline.
The analysts at Benchmark raised their FY13 estimates for the company to $16.45 billion in revenue from $16.30 billion, and the EBITDA at $5.49 billion from $5.44 billion, while their EPS estimate remained at $2.75 per share.
In a research note, the analysts wrote, “eBay trades at 18x 2013E adjusted EPS and 11x 2013E EBITDA, essentially in line with e-commerce comparables at 17x and 10x, respectively, and above S&P 500 index at 13x. Given the positive outlook and strong margins, we believe a modest premium is warranted. We use a multiple of 23x 2013E EPS to arrive at our price target at $63 per share.”