By Ben Fox Rubin
EBay Inc.'s (EBAY) second-quarter profit soared as the e-commerce retailer continued to see strength in its PayPal payments business and a turnaround at its auction website.
EBay projected third-quarter adjusted earnings between 53 cents and 55 cents a share on $3.3 billion to $3.4 billion in revenue. Analysts polled by Thomson Reuters most recently expected 55 cents and $3.42 billion, respectively. It also reaffirmed its full-year guidance.
Shares were up 4.2% to $42.16 after hours. The stock last month hit a five-year high and is still up 33% so far this year through the close.
While its revenue-growth rate has trailed that of rival Amazon.com Inc. (AMZN), eBay has seen positive signs from its turnaround efforts, as it has worked to remove clutter from its website, improve its search engine and promote fixed-price sales and free-shipping offers.
The marketplaces segment--eBay's largest division--posted 9.1% higher revenue. Gross merchandise volume, the total value of goods sold on the website, grew 10%, excluding vehicle sales.
PayPal, which is on track to become eBay's largest business, has made significant inroads in payments made via mobile devices and is moving into payments for brick-and-mortar stores, helping eBay tap into the larger network of sales at traditional retail locations.
Revenue in the payments segment, which includes PayPal, continued to grow, posting a 26% increase.
Overall, eBay reported a profit of $692 million, or 53 cents a share, up from $283 million, or 22 cents a share, a year earlier. Excluding stock-based compensation and other items, per-share earnings rose to 56 cents from 48 cents. Net revenue increased 23% to $3.4 billion.
EBay's guidance in April called for a per-share adjusted profit between 53 cents and 55 cents with $3.25 billion to $3.35 billion in revenue.
Gross margin narrowed to 71% from 72%.
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