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eBay Posts Profits, Yet Projects Revenue Decline

In one of the most gloomy outlooks from eBay yet, the company says the fourth quarter will be "challenging."
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eBay announced last week it recorded a third-quarter profit, but the company warned investors the fourth quarter would be “challenging.”

eBay earned $492 million in the quarter that ended Sept. 30. In the year-ago period, eBay reported a loss of $936 million stemming from charges to its Skype telecommunications unit. Revenue during the quarter rose 12 percent to $2.12 billion.

The number of new listings jumped 26 percent from the same period a year ago to 700 million. But the number of active users rose just 3 percent to 85.7 million. Gross merchandise volume, which refers to the total amount of money that flows from transactions on the site, declined for the first time, falling almost 1 percent to $14.3 billion.

eBay cut its full-year outlook, which put its fourth-quarter expectations well below those of Wall Street analysts. For the year, eBay now expects revenue of $8.53 billion to $8.68 billion. The company had previously expected between $8.8 billion to $9.05 billion in revenue.

eBay CEO John Donahoe admitted his company is being affected by the tough economic environment, and says there’s no way to predict how long economic issues will persist.

“The thing about periods like this – and this is probably the third or fourth recession in my career – is you never know how long they’ll last or how deep they’ll go,’’ he said.

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