EBay Inc reported a higher quarterly profit on Wednesday as consumers made greater use of its PayPal service, but the e-commerce company gave a disappointing holiday quarter forecast, sending shares down 4.5 percent in after-hours trading.
EBay expects revenue of between $4.5 billion and $4.6 billion for the quarter ending Dec. 31, compared with the $4.64 billion estimated by analysts, according to Thomson Reuters I/B/E/S.
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EBay lagged behind rival Amazon.com Inc for several years, but Chief Executive John Donahoe has led a turnaround in recent years that focuses on mobile shoppers, international expansion and tie-ups with local physical stores.
Net income for the third quarter was $689 million, or 53 cents a share, up from $597 million, or 45 cents a share, a year earlier. Excluding the benefit of its sales of stakes in e-commerce companies RueLaLa and ShopRunner, eBay earned 64 cents, one cent better then expected.
For the holiday quarter, eBay expects a profit of 79 cents to 81 cents a share, while Wall Street analysts estimate 83 cents. Revenue rose 14.3 percent to $3.89 billion.
PayPal, eBay's online payments division, reported that total payments volume rose 24.7 percent to $43.8 billion.
EBay said that gross merchandise volume, or the dollar value of merchandise sold on its marketplaces, rose 12.7 percent to $18.4 billion in the United States, excluding auto sales.