San Jose, Calif.-based eBay earned revenues of $4.37 billion for an EPS of 69 cents a share, an increase of 13% year over year. Analysts surveyed by Thomson Reuters expected EPS of 68 cents on $4.38 billion in revenue.
Third-quarter guidance was also below analyst expectations: the company expects third-quarter revenues of $4.3-$4.4 billion and EPS of 65 cents to 67 cents, while the consensus estimates were $4.42 billion and 70 cents, respectively. The expected 2014 revenues of $18-$18.3 billion and EPS of $2.95 $3 were in line with consensus estimates of $18.2 billion on EPS of $2.98. The PayPal division’s revenues rose 20% year-over-year versus 19% in the first quarter.
This quarter has been a difficult one for eBay. In May, for example, a massive hacking forced the company to ask 145 million users to change their passwords. Google’s search algorithm update in May negatively impacted eBay search results rankings. The company also sparred with activist investor Carl Icahn, a shareholder who wanted to spin off PayPal.
"In a challenging second quarter, our commerce and payments platforms delivered strong enabled commerce volume growth of 26 percent," said eBay CEO John Donahoe in a press release. "PayPal generated another strong quarter while eBay's growth was hampered by its global password reset for all users. We continued our momentum in the four competitive commerce battlegrounds of mobile, local, global, and data."