EBay Earnings Drop In EU and Asia ‘Head Winds’

Online retailer and auction website eBay reported an 8% drop in second-quarter profit, citing a warning of economic ‘head winds’ in Europe and South Korea.

Slow growth in economy

ebayThe company reported second quarter net profit of $640 million (£421m) for the three months to the end of June, lower from the $692 million it produced in the same quartera year earlier.

EBay revenue climbed 14% to $3.88 billion. The results were roughly in line with analysts’ expectations.

Shares in eBay declined more than 5% in after-hours trading on the results.

Overseas pressure

John Donahoe, eBay’s chief executive, said its core businesses were strong, but warned the weak economic status in Europe and South Korea would “continue to be a challenge.”

“We expected continued macroeconomic head winds in Europe and Korea. Despite that, we still expect to deliver within the range of our guidance for the full year,” Donahoe said after the results were issued.

PayPal, eBay’s online payment business, saw revenues increase by 20% to $1.6 billion. It had 132 million active accounts by the end of the second quarter, higher by 17% from a year ago.