EBay Logs Growth

EBay Inc. grew its revenue and customer roll in the second quarter, amid a massive security breach and a since-resolved dispute with activist investor Carl Icahn.

The San Jose, Calif., e-commerce giant reported another profitable period Wednesday, driven by payments unit PayPal, which Mr. Icahn had wanted spun off.

But the company offered a somewhat cautious outlook that pushed its shares down about 2% after hours.

The company said it expects revenue of between $4.3 billion and $4.4 billion for the current quarter and adjusted earnings of between 65 cents and 67 cents. Analysts polled by Thomson Reuters were looking for $4.42 billion and 70 cents a share.

EBay also lowered the high end of its revenue forecast for the year by $200 million, now putting the range at $18 billion to $18.3 billion. It affirmed its earnings view.

Meanwhile, for the three months ended June 30, eBay posted net income of $676 million, up from $640 million in the same quarter a year earlier.

Excluding certain expenses, eBay reported earnings of 69 cents a share, which compares with analysts" forecasts of 68 cents on that basis. EBay had said it expected earnings between 67 cents and 69 cents a share.

Revenue rose 13% to $4.37 billion from $3.88 billion a year earlier, in line with eBay's own forecast of a range of $4.33 billion and $4.43 billion.

It was an eventful quarter for eBay. The company in May reported a security breach to its namesake marketplace that it said could have compromised some information for its 145 million customers. EBay said Paypal was unaffected, but the breach was a knock to the company's reputation for security.

As well, eBay reached a deal with Mr. Icahn to back off his proposal that the company separate its payments unit; Mr. Icahn agreed to work with eBay as an adviser.

EBay will have to find a new chief for PayPal after David Marcus, who had run the division for two years, left for an executive job at Facebook Inc.

Write to Greg Bensinger at [e-mail]

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