EBay Inc. agreed to sell its Enterprise unit to a group led by Permira for $925 million and reported second-quarter sales that beat analysts' estimates on the eve of its breakup from transaction business PayPal.
Revenue advanced to $4.68 billion including the enterprise business, eBay said in a statement, compared with the analysts average estimate of $4.49 billion. Sales decreased 3% to $2.1 billion for the online marketplace unit. PayPal revenue topped sales from the online marketplace unit for the second consecutive quarter.
Investors are eager for any indication about how eBay will perform on its own after PayPal begins trading as a separate company on Monday. The online marketplace has struggled with sluggish sales and user growth after a data breach last year forced customers to change passwords. EBay also suffered from reduced traffic after Google Inc. altered its search engine.
There is a lot of concern that between Amazon and retailers going online, EBays competitive challenges are getting worse and not getting better, said Gil Luria, analyst at Wedbush Securities Inc. in Los Angeles.
EBay attracts 157 million buyers to its site and handles more than $80 billion in annual sales volume. The San Jose-based company last year announced plans to spin off PayPal following pressure from activist investor Carl Icahn, who said the slow- growing marketplace was holding back the payments business.
Global e-commerce sales will hit $1.59 trillion this year, up 21%, according to EMarketer. EBays marketplace sales growth has lagged behind that pace so far this year, coming in at 7% in June, 6.6% in May and 5.8% in April, according to e-commerce consultant ChannelAdvisor Corp.
EBay issued full-year forecasts for the soon-to-be separate companies. The online marketplace predicted earnings of $1.72 to $1.77 a share, excluding some items. Sales will grow 3% to 5% excluding currency effects.
PayPal, which has 165 million accounts and gets 24% of its transactions on eBay, estimated earnings of $1.23 to $1.27 a share, excluding items, on sales growth of 15% to 18%.