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EBay posts higher earnings, revenue for Q3

NEW YORK -- EBay reported Tuesday that its third-quarter net income rose 22 percent thanks to higher revenue at its PayPal payments service and at the marketplaces business that includes eBay.com.

The results were roughly within expectations, with revenue a little light and earnings a tad higher than what Wall Street analysts had predicted.

CEO John Donahoe sounded an upbeat note about the holiday shopping season and eBay Inc. raised slightly its full-year guidance for net income and revenue.

“In the U.S., obviously we have to get past the elections, and my sense is that consumers are ready to get the elections behind them,” he said in an interview, adding that he's “cautiously optimistic” about consumer spending over the holidays.

The online commerce company said Wednesday that it earned US$597 million, or 45 cents per share, in the July-September period. That's up from US$491 million, or 37 cents per share, a year earlier.

Adjusted earnings were 55 cents per share in the latest quarter, a penny ahead of Wall Street's expectations.

Revenue grew 15 percent to US$3.4 billion from US$2.97 billion. On average, analysts surveyed by FactSet were expecting revenue of US$3.41 billion.

Forrester analyst Brian Walker described the results as “lukewarm.”

The company makes most of its money by charging merchants a fee to list items posted for sale. It also generates revenue from PayPal transaction fees. Besides its namesake online marketplace, eBay owns the ticket-selling website StubHub, Shopping.com and GSI Commerce, a provider of e-commerce and online marketing services.

Walker said PayPal “continues to put up good numbers,” but he called eBay's core marketplace and GSI's results “disappointing.” The company, he said, is losing market share to competitors such as Amazon.com Inc. and Wal-Mart Stores Inc.

Revenue grew 23 percent to US$1.37 billion at PayPal, the company's fastest-growing business. PayPal ended the quarter with 117.4 million active accounts, up 14 percent from 103 million a year earlier. Donahoe said mobile continues to be a “game-changer” for eBay.

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Two women walk in front of an eBay sign at the company's headquarters in San Jose, California, Wednesday, Oct. 17.(AP)

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