eBay's Q2 brightens as consumers opt out of retail

As consumers' retail spending declines, eBay's (EBAY) prospects brighten. At least that's one possible story to be told by eBay's second quarter 2009 results, beating analyst expectations at 25 cents a share -- $327.3 million -- or 37 cents a share excluding one-time charges. Analysts thought the company would earn 36 cents a share; last year eBay recorded 35 cents per share. Revenue, mirroring a story across the retail sector, fell, but only four percent, to $2.1 billion. Analysts expected a much sharper drop, nine percent, to $1.99 billion for the quarter.

Shares were up today in anticipation of results, 2.75 percent to $19.45, and they were up still more in after hours trading to above $20, another four percent thanks to the surprise. The story is told in the divisions; eBay's Marketplace segment, comprising auctions, classified listings, and stores, fell 14 percent from the year-earlier quarter, whereas money-mover PayPal grew 11 percent since second quarter 2008.