EBay Inc.'s (EBAY) first-quarter profit rose 20% on continued strength in the company's payments business, prompting the company to boost its outlook for the year.
Shares rose 4.5% to $37.50 after hours on the stronger-than-expected results. The stock was up 18% so far this year through Wednesday's close.
The e-commerce operator raised its 2012 adjusted earnings forecast by 5 cents a share and lifted its full-year revenue target by $100 million, calling for a profit of $2.30 to $2.35 a share with revenue between $13.8 billion to $14.1 billion.
The company also projected its second-quarter profit between 53 cents and 55 cents a share with $3.25 billion to $3.35 billion of revenue. Analysts polled by Thomson Reuters were projecting a 54-cent profit on $3.36 billion of revenue.
EBay's core earnings have improved over the past year, led by strong growth in its online payments business. The company has also spent several years overhauling its online marketplace to increase its emphasis on fixed-price, high-volume merchants. The effort positions it more squarely as a competitor to Amazon.com Inc. (AMZN), which has benefited along with eBay from growing demand for online merchandise.
At the same time, eBay has seen stronger growth from its smaller online-payments segment, which includes PayPal. Revenue in that segment rose 32%.
PayPal is facing new challenges after it lost division chief Scott Thompson, who left to become Yahoo Inc.'s (YHOO) chief executive. New PayPal head David Marcus now leads the business as it works to convince major retailers to introduce in-store electronic-payment systems using its technology.
The marketplaces segment--eBay's largest division--posted 11% higher revenue. Gross merchandise volume, the total value of goods sold on the website, grew 12% excluding vehicle sales.
Overall, eBay reported a profit of $570 million, or 44 cents a share, up from $476 million, or 36 cents a share, a year earlier. Excluding stock-based compensation and other items, per-share earnings rose to 55 cents from 47 cents as net revenue increased 29% to $3.28 billion.
EBay's cautious guidance in January projected a per-share profit between 50 cents and 51 cents with $3.05 billion to $3.15 billion of revenue.
Gross margin narrowed to 70% from 71.4%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com