SAN FRANCISCO — EBay’s net income soared in the fourth quarter, in large part because of the sale of its remaining investment in Skype and continued success of PayPal.
But financial results released Wednesday by the company showed that eBay’s core retailing business, what it calls Marketplace, finally seems to be making the turnaround that John Donahoe, eBay’s chief executive, has been promising investors. Four years ago, he outlined a plan to revive the company’s marketplace business by investing in new technologies, freshening the Web site and recasting it as an online outlet mall rather than a flea market.
In the fourth quarter, its marketplace business pulled in $1.7 billion in revenue, a 16 percent jump from the same period a year ago and four times faster than the same quarter a year ago. “EBay’s results look workmanlike and impressive,” said Jordan Rohan, an analyst at Stifel Nicolaus.
“We’re gearing our whole company to help retailers in this new multichannel world. EBay marketplace is one part of that equation,” Mr. Donahoe said in an interview after the announcement. “But the simple fact is that more and more people are using our mobile payment systems.”
The payments unit, which consists almost entirely of PayPal, was responsible for more than 36 percent of the company’s fourth-quarter revenue — $1.24 billion — which grew 28 percent from the same period a year ago.
EBay said net income in the fourth quarter rose to $1.98 billion , or $1.51 a share, from $559 million, or 42 cents a share in the same quarter a year ago. Excluding Skype and other items such as stock-based compensation expenses, eBay reported profit of $788.6 million or 60 cents a share, for the three months ending Dec. 31.
The company said revenue climbed 35 percent to $3.4 billion from the same period in 2010. But income and revenue were higher than the consensus estimates of analysts.
EBay’s future growth will continue to depend on the success of PayPal, and particularly its new mobile payment business. Last year, the company projected that its mobile payment volume would hit $1.5 billion in 2011. It later increased that estimate to $3 billion, but Wednesday reported it was $4 billion for the year, more than five times its payment volume in 2010. The company now projects that mobile payment volume will reach $7 billion in 2012.
But the company’s earnings report comes on the heels of news this month that Scott Thompson, PayPal’s president, left the company to join Yahoo as its chief executive. Under Mr. Thompson’s leadership, PayPal more than doubled its user base and revenue. And Mr. Thompson’s departure came as eBay faces new competition in the mobile space. Mobile payment start-up Square, Google’s mobile payment product, Google Wallet, and Isis, a joint mobile payment venture by ATT, T-Mobile and Verizon, all recently entered the mobile payment space.
“Scott’s departure was a surprise,” Mr. Donahoe acknowledged in an earnings call. “But PayPal has never been stronger and PayPal leadership has never been stronger.”
Mr. Donahoe, who will serve as interim president, said he will worry about succession in February.
“The whole organization is really focused on our 2012 plan,” he said. “We won’t skip a beat.”
But the company advised investors that the current quarter’s results would be lower than analyst forecasts. For the current quarter, eBay said it expected revenue between $3.05 billion and $3.15 billion , slightly below analyst estimates of $3.18 billion. The company said that was because it plans to make investments this quarter in data centers and infrastructure for the year. For the full year, eBay said it expects revenue in the range of $13.7 billion to $14 billion , at or slightly higher than the $13.7 billion analysts have forecast.
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