EBay posts profit but warns of sales slump

EBay is expecting to take a hit in sales this Christmas, despite posting profits in the three months to August. It has recorded a net profit of $492m (£250m) but says it will reduce its 2008 revenue forecast.

The company has cut its annual revenue forecast from $9bn (£4.5bn) to $8.7bn (£4.3bn), which chief executive John Donahoe says is due to the current economic climate.

“There is a high degree of economic uncertainty and turmoil in the financial markets. This is impacting consumer spending and e-commerce growth rates, and we’re seeing it across all of our platforms,” Donahoe says.

EBay chief financial officer, Bob Swan, adds: “We need a lot more clarity, or at least a crystal ball, to indicate what us going to transpire over the critical holiday season for us, but there isn’t one.”

The cut in revenue forecasts comes a week after the company announced it would axe 10% of its workforce before the end of the year, and acquire online payment firm Bill Me Later and two Danish classified ad companies.

EBay services include the eBay auction websites, the PayPal payment system and the Skype internet telecoms service.

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