EBay’s 4Q performance caps company’s best year yet

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Revenue climbed 18 percent from the previous year to nearly $4 billion, in line with what analysts forecast.

As has been the case for some time, PayPal generated the greatest growth. Fourth-quarter revenue from the payment service totaled $1.54 billion, a 24 percent increase from the previous year.

PayPal, which eBay bought a decade ago, added 5 million more accountholders in the fourth quarter, its biggest three-month gain in eight years. The service now has about 123 million accountholders, many of whom contributed to the roughly 700 million payments processed by PayPal during the fourth quarter.

EBay is now trying to extend PayPal’s reach offline. The company already has struck agreements with 23 retailers, including Abercrombie & Fitch, Barnes & Noble, RadioShack and Home Depot, to accept PayPal in their stores. Beginning this spring, PayPal also will be accepted at retailers that take the Discover card.

The marketplaces division produced fourth-quarter revenue of $2.05 billion, up 16 percent from the previous year.

To start this year, eBay expects adjusted first-quarter earnings of 60 cents to 62 cents per share on revenue ranging from $3.65 billion to $3.75 billion.

Those figures are below analysts’ predictions calling for adjusted earnings of 64 cents per share on revenue of $3.8 billion. Donahoe said he believes some analysts neglected to consider that there will be one less day in this year’s first quarter coming off of 2012’s leap year and that online shopping is always sluggish on Easter Sunday, which is falling in March this year instead of April as it did last year.

For all of 2012, eBay earned $2.6 billion, or $1.99 per share, on revenue of $14.1 billion. With the Skype sale, eBay earned $3.2 billion, or $2.46 per share, in 2011. Revenue for that year totaled $11.7 billion.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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