EBAY eBay Inc

By Laura Stevens 

EBay Inc. on Wednesday said revenue grew 5.6%, a third straight quarter of sales gains as a new initiative to transform the online retailer's search results and image has begun to pay off.

The San Jose, Calif.-based online sales platform on Wednesday reported $2.22 billion in revenue, compared with last year's $2.1 billion. Net income of $413 million, or 36 cents a share, was lower than the $539 million, or 45 cents, the company posted a year ago.

Excluding certain items, eBay posted earnings of 45 cents a share, up 2 cents from a year earlier and topping the 44 cents analysts surveyed by Thomson Reuters had expected.

EBay's shares fell 7.9% in trading after the market's close, after finishing the day up 2.8% at $32.52.

The company also said Wednesday it expects fourth-quarter revenue of $2.36 billion to $2.41 billion and adjusted earnings from continuing operations of 52 cents to 54 cents, compared with analysts' expectations of $2.4 billion in revenue and 54 cents of per-share earnings.

The e-commerce site has struggled to find its footing following a split from payment services provider PayPal Holdings Inc. last year, and has launched a rebranding effort to shed its legacy image as an auction-style garage sale. It's trying to attract younger shoppers through a new social media advertising campaign featuring supermodel Karlie Kloss ordering goods from the site, among other initiatives.

It's also trying to make eBay more easily searchable for shoppers who don't have time to scroll through thousands of search results -- especially on their phones. As part of that effort, it's cataloging items on its site, something that should help improve its Google search results. Previously, individual listings changed too frequently to surface high on a search engine, but now items can be grouped and displayed by brand, type and deals.

Ticket seller and marketplace StubHub, a bright spot for the e-commerce company over the last few quarters, reported a 31% increase in sales to $261 million, outpacing eBay's growth as a whole. The business earlier this year acquired both Spanish rival Ticketbis and software firm Ticket Utils.

EBay said it had 165 million active buyers on the site, up from the second quarter, when it reported it had 164 million.

Write to Laura Stevens at laura.stevens@wsj.com

(END) Dow Jones Newswires

October 19, 2016 16:51 ET (20:51 GMT)

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