01—Abstract
Summary
Summary of the 10-Q filed April 28, 2009. Cited figures are marked; the original filing is the authoritative source.
eBay Inc.'s first quarter 2009 results show a challenging operating environment marked by an 8% year-over-year decline in net revenues to $2.02 billiona, reflecting weak consumer spending and a negative impact from foreign exchange rates.
Diluted earnings per share also decreased from $0.34 in Q1 2008 to $0.28b in Q1 2009. While the core Marketplaces segment experienced an 18% revenue decline, the Payments and Communications segments demonstrated resilience with 11% and 21% revenue growth, respectively, driven by PayPal and Skype. The company's balance sheet reflects a decrease in total assets to $15.13 billion from $15.59 billion at year-end 2008, largely due to a reduction in goodwill and intangible assets.
Cash and cash equivalents remained substantial at $3.06 billionc. Despite the revenue headwinds, eBay generated $668.5 million in operating cash flow, though this was a decrease from the prior year. The company faces ongoing litigation and macroeconomic uncertainties but plans to fund its operations, capital expenditures, and a pending acquisition of Gmarket with existing cash and operational cash flow.
02—Key points
Key Highlights
- Net revenues declined 8% to $2.02 billion, impacted by a weak economy and foreign currency headwinds.
- Diluted earnings per share decreased to $0.28 from $0.34 year-over-year.
- Marketplaces segment revenue dropped 18%, while Payments and Communications segments grew 11% and 21% respectively.
- Total assets decreased to $15.13 billion, with a notable reduction in goodwill.
- Operating cash flow was $668.5 million, down from $766.2 million in the prior year's quarter.
- The company has a strong cash position with $3.06 billion in cash and cash equivalents.
- eBay announced a definitive agreement to acquire Gmarket Inc. for approximately $1.2 billion, expected to close by the end of Q2 2009.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2009, eBay Inc kept $0.18.
- Revenue$2.02B100.0%
- Cost of revenue−$573.4M28.4%
- Gross profit$1.45B71.6%
- Operating costs−$1.02B50.7%
- Operating income$422.8M20.9%
- Interest, other & tax−$65.7M3.2%
- Net income$357.1M17.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2009filed April 28, 2009Financial Statements
| Revenue | $2.02B |
| Cost of Revenue | $573.39M |
| Gross Profit | $1.45B |
| R&D Expenses | $201.52M |
| Operating Expenses | $1.02B |
| Operating Income | $422.76M |
| Net Income | $357.11M |
| EPS (Basic) | $0.28 |
| EPS (Diluted) | $0.28 |
| Shares Outstanding (Basic) | 1.28B |
| Shares Outstanding (Diluted) | 1.29B |
05—Questions
Frequently Asked Questions
What was the primary driver of the revenue decline in the first quarter of 2009?
The primary driver of the revenue decline was a combination of weak consumer spending in the prevailing macroeconomic environment and a significant negative impact from foreign currency exchange rate fluctuations, which reduced net revenues by approximately $191.6 million compared to the prior year.
How did the different business segments perform?
The Marketplaces segment, eBay's core business, saw an 18% decrease in revenue. However, the Payments segment (including PayPal and Bill Me Later) grew revenue by 11%, and the Communications segment (Skype) experienced strong growth with a 21% revenue increase. This diversification helped offset some of the decline in Marketplaces.
What is the company's financial health in terms of liquidity?
eBay maintains a strong liquidity position. As of March 31, 2009, the company had $3.06 billion in cash and cash equivalents. It also had $1.4 billion available under its credit agreement. The company believes these resources are sufficient to fund its operations, capital expenditures, announced acquisitions, and other obligations.
What significant corporate developments are mentioned for the near future?
eBay announced a definitive agreement to acquire Gmarket Inc. for up to approximately $1.2 billion, expected to be completed by the end of the second quarter of 2009. This acquisition signals a strategic move to expand its presence, particularly in the Korean market.
06—Continue