eBay Inc. (NASDAQ: EBAY) is scheduled to release its second quarter earnings after the closing bell on Wednesday, July 21, 2010. Analysts, on average, expect the company to report earnings of 39 cents per share on revenue of $2.17 billion. In the year ago period, the company reported earnings of 37 cents per share on revenue of $2.10 billion.
eBay Inc. and its subsidiaries provide online marketplaces for the sale of goods and services, online payments services, and online communication offerings to individuals and businesses in the United States and internationally. It operates in three segments: Marketplaces, Payments, and Communications.
In the preceding Q12010, the San Jose, California based company reported that net income climbed 11% to $398 million or 30 cents a share, from $357 million or 28 cents a share in the year-earlier quarter. On an adjusted basis, the company earned $554 million or 42 cents a share. Revenue grew 9% to $2.2 billion. Analysts, on average, expected the company to report earnings of 41 cents a share on revenue of $2.18 billion. Total gross merchandise volume, or GMV, grew 24% from the same quarter last year to $13.4 billion.
In April, the company said that it expects to report second quarter net revenues in the range of $2.15 billion to $2.20 billion, representing growth of 11% to 14% excluding the 2009 impact of Skype. GAAP earnings per diluted share are anticipated in the range of $0.27 to $0.29 and non-GAAP earnings per diluted share in the range of $0.37 to $0.39, representing growth of 9% to 15% excluding the 2009 impact of Skype. Full-year net revenues are anticipated in the range of $8.8 billion to $9.1 billion, representing growth of 9% to 12% excluding the 2009 impact of Skype.
Ebay, which started as an online auction company, later added fixed-price items to its marketplace in order to position itself as a conventional online retailer. However, in doing so, the company alienated a significant base of customers, both buyers and sellers. In the first quarter, fixed-price sales accounted for more than 60% of its marketplaces business. Sales in its fixed-price format grew 33%, while auctions fell 3%.
Meanwhile, Paypal continues to grow at a remarkable pace. Revenue at PayPal business unit jumped 26% to $809 million in the first quarter.
The company is targeting international markets to drive future growth. In May, EBay agreed to create a joint venture with Young Bae Ku, the founder of the company's Gmarket business, to expand the unit's online marketplaces in Japan and Singapore. The company is also expanding rapidly in mobile commerce market. Late in May, the e-commerce giant acquired RedLaser, the popular barcode-scanning application for iPhone, and related technology from Occipital. Ebay also recently announced the world wide availability of its mobile application for handsets running under Google's Android operating system. The company, which has emerged as a leader in the m-commerce market, expects mobile apps to generate $1.5 billion in gross merchandise volume this year. In 2009, Ebay's mobile channel accounted for more than $600 million in sales.
According to few industry experts, eurozone's problems and stronger dollar could negatively impact Ebay earnings, as it generates a significant amount of revenue from overseas markets.
Among other developments, eBay was recently sued for at least USD 3.8 billion by XPRT Ventures LLC, which accused the online auctioneer and retailer of breaking a confidentiality agreement and infringing six patents to develop online payment systems Paypal.
In terms of stock performance, eBay shares have lost nearly 12 percent since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.
