EBAY INC Quarterly Report for Q1 Ended Mar 31, 2009

Summary

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 billion, 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 $0.28 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 billion. 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.

Key Highlights

• 1Net revenues declined 8% to $2.02 billion, impacted by a weak economy and foreign currency headwinds.
• 2Diluted earnings per share decreased to $0.28 from $0.34 year-over-year.
• 3Marketplaces segment revenue dropped 18%, while Payments and Communications segments grew 11% and 21% respectively.
• 4Total assets decreased to $15.13 billion, with a notable reduction in goodwill.
• 5Operating cash flow was $668.5 million, down from $766.2 million in the prior year's quarter.
• 6The company has a strong cash position with $3.06 billion in cash and cash equivalents.
• 7eBay announced a definitive agreement to acquire Gmarket Inc. for approximately $1.2 billion, expected to close by the end of Q2 2009.

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