EBay reported the amount of e-commerce that flowed through its platforms grew 27 percent to $63 billion in the third quarter driven by strong growth in cross-border and mobile sales, but again lowered its full-year revenue forecast due to lingering effects of a security breach last March.

The value of merchandise sold across borders grew 27 percent to $13.9 billion during the quarter ended Sept. 30, and now generates 22 percent of EBay’s revenue. Mobile enabled commerce value grew 67 percent to $13.5 billion, or now generates 21 percent of eBay revenues. EBay acquired 7.3 million new active users during the quarter, including 4.4 million at PayPal, which EBay plans to spin off next year to enhance shareholder value.

Still, eBay lowered its revenue guidance for fiscal 2015 for second time this year and reported that eBay Enterprise, which helps Dick’s Sporting Goods, Eastern Mountain Sports and other large retailers and brands run their online stores, failed to break even.

EBay Enterprise enabled $900 million in gross merchandise volume (GMV), during the quarter, up $113 million, or 14 percent. Comparable stores sales increased 13 percent on top of 13 percent growth in the third quarter of 2013. Those sales pushed the segment’s net transaction revenues up 7.6 percent to $199 million. Revenues from Marketing and other services, however, declined $7.0 million, or 10.4 percent to $60 million as retailers and brands spent less on its call center, fulfillment and digital marketing services.

As a result, the segment grew overall revenue by 2.7 percent to $259 million, but failed to break even as the decline in Marketing and other revenues coincided with increased spending to prepare for the peak holiday season. Operating margins declined 390 basis points to negative 0.5 percent.

Password reset remains a drag
EBay reported lower, but big profits at its Marketplaces segment, its much larger legacy business, which continues to transition away from its auction model and toward full-price selling in a bid to win over smaller merchants.

GMV grew 9 percent, with the U.S. up 7 percent and international up 11 percent. Transaction revenues rose $98 million, or 6.1 percent, while Marketing and other services revenues grew by $31 million, or 7.4 percent. Operating income reached $775 million, down $14 million, or 1.8 percent. EBay attributed teh decline to higher spending on marketing to reengage customers who stopped using eBay.com after a security breach in March that prompted eBay to begin asking users to reset their passwords.

While the global password reset has slowed growth, Marketplaces still ended the quarter with 152 million active buyers, up 3.4 million from a year earlier. Listings surpassed 800 million and the value of merchandize sold over its mobile platform surged 41 percent to $7 billion. Fixed price sales grew 15 percent and reached 79 percent of sales. 

FY 2014 Revenue Forecast Lowered
EBay lowered its revenue guidance for fiscal 2014 to $17.85-$17.95 billion in fiscal 2014, down from $18.0-$18.3 billion issued in August and $18.5 billion issued in May. The reset was attributed primarily to the higher than expected marketing costs incurred in the wake of the global password reset and changes to Google’s organic search algorithm earlier this year. The new guidance assumes fourth quarter net revenues in the range of $4.85-$4.95 billion, which would be an increase of 7.1-9.3 percent; a step down from the 13.5 percent growth eBay reported in the fourth quarter of 2013. EBay expects diluted earnings per share to improve on both a reported and non-GAAP basis due to higher volume and more generous U.S. R&D tax credits.