EBay profit climbs on PayPal popularity

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The Independent Online

Online auction star eBay said Wednesday its recent quarter profits soared with a boost from its Internet financial transactions platform PayPal.

EBay reported net income of 412.2 million dollars, or 31 cents per share, with PayPal delivering a record-high performance in the quarter ending June 30. The company's profit in the same quarter in 2009 was 25 cents per share.

"Our eBay turnaround remains on track, with strong performance in Europe, significant changes in the US and continued improvements to the buying and selling experience," eBay chief executive John Donahoe said in a statement.

"PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of e-commerce."

Revenue was 2.2 billion dollars, a six percent rise from the same quarter a year earlier, according to eBay, which is based in the northern California city of San Jose.

The company estimated its profit this fiscal year will range from 1.23 dollars to 1.28 dollars per share on revenue of 8.8 to 9.0 billion dollars.

The engines behind eBay's earnings in the latest quarter were PayPal and a "Bill Me Later" service that extends credit to people buying things online.

Approximately three million new PayPal accounts were opened in the fiscal quarter and Bill Me Later revenue leapt 25 percent, according to eBay executives.

"PayPal is strong and has great potential and momentum, and eBay continues to make progress," Donahoe said in an earnings conference call with analysts and media.

"We still have work to do in the United States, our toughest and most competitive market."

A strengthening US dollar relative to the euro was expected to hurt eBay, which got nearly 60 percent of its revenue from outside the United States.

"I'm not satisfied with where we are at in (the second quarter) but at least we are on the right path," Donahoe said.

The price of eBay stock rose more than 3.0 percent to 20.89 dollars per share in after hours trading following the release of the earnings results.