NEW YORK (TheStreet) -- Shares of eBay are slipping on Wednesday after the company reported a weaker-than-expected second-quarter profit outlook but first-quarter profit that beat analyst estimates, boosted by its PayPal unit.
Shares of eBay (EBAY) are slipping on Wednesday after the online marketplace reported a first-quarter loss of $2.3 billion tied to a tax charge and issued a weaker-than-expected profit outlook for the second quarter.
EBay still managed to report first-quarter profit that beat Wall Street expectations. The company earned 70 cents a share during the quarter, topping analyst estimates of 67 cents a share, according to Thomson Reuters. eBay CEO John Donahoe called the first quarter "strong" with enabled commerce volume up 24% and revenue up 14%.
The company's results were boosted by its PayPal unit, where revenue grew to $1.8 billion. EBay said PayPal added 5.8 million new active registered accounts, a 16% rise, in the quarter.
In a Tuesday conference call, Donahoe said, "We affirmed that eBay and PayPal are better together." He called them "great businesses" that "support and enhance each other." Activist investor Carl Icahn had been pushing for eBay to spin off its PayPal unit into a separate company. Donahoe called the issue a "distraction" that the company has put behind itself. "Now our attention is focused on growth and execution," he said.
In fact, Goldman Sachs (GS) analysts said they are raising their 2014-2016 revenue and adjusted EBITDA estimates 1% and 5% on average, respectively, on better PayPal and Enterprise segment revenue growth trajectories and cost leverage.
For the second quarter, eBay said it expects to earn profit between 67 cents and 69 cents a share, falling short of analyst expectations for profit of 70 cents.
At last check, shares of eBay were falling more than 6% to $51.20.
In New York, I'm Brittany Umar for TheStreet.
Written by Brittany Umar in New York.