US online auction giant eBay last night reported a 22% drop in quarterly net profit despite improved results from online payment service PayPal and Internet communications firm Skype.
The California-based eBay said net profit fell to $357.1m in the quarter while revenue declined by $171.6m from the same quarter last year to $2.02 billion.
Earnings per share of 39 cents were better than the 34 cents per share expected by Wall Street analysts and the 32-34 cents per share forecast by eBay in January.
'We delivered solid results in the first quarter and moved aggressively to strengthen our portfolio for longer-term growth,' eBay president and CEO John Donahoe said in a statement.
'With a macroeconomic environment that remains challenging, we are focused on operating discipline and strong execution of our three-year growth priorities in our core ecommerce and online payments businesses,' he said.
Revenue fell 18% at eBay's core 'Marketplaces' business unit which consists of eBay, Shopping.com, StubHub, Kijiji and other e-commerce sites to $1.22 billion.
The company CEO said the company's revenue drop was attributable to the impact of the strengthening dollar and the decline of the core business in difficult macroeconomic conditions.
Revenue from Skype, which eBay plans to spin off through an initial public offering next year and make an independent company, grew 21% to $153.2m, eBay said.
EBay announced last week that it planned to spin off Skype, which it purchased in 2005 for $2.6 billion, with an IPO to be completed in the first half of 2010.
Announcing the move, Donahoe said that Skype has limited synergies with eBay and PayPal and spinning off the company would allow eBay to focus on its core online auction and payments business.
Skype added 37.9 million new users in the quarter and now has more than 443.2 million registered users.
EBay said its 'Payments' business unit, which includes PayPal and Bill Me Later, saw revenue increase by 11% to $643m. The number of active registered accounts increased by 22% to 73.1 million.
