NEW YORK (AP) -- EBay Inc. is expected to report strong results for its U.S. business when it reports fourth-quarter results on Wednesday after the market closes. But analysts say the e-commerce and online payments company is likely to see dampening growth in Europe, where the euro crisis is stalling economic growth and consumer spending.
WHAT TO WATCH FOR: Investors will be looking for signs of growth in eBay's marketplaces unit, which includes eBay.com and other e-commerce sites, and in PayPal, which processes payments on the Web.
PayPal has been growing quickly, and has allowed eBay to expand beyond its namesake auction site. People use PayPal to pay for things all over the Internet — on computers and mobile devices. EBay has been trying to expand its PayPal business and get it into brick-and-mortar retail shops. It is currently testing out a service that lets people use their PayPal accounts to pay for merchandise in Home Depot stores.
Analysts expect eBay's U.S. results to be solid. Benchmark's Frederick W. Moran said a "strong domestic holiday season could spark eBay's US marketplace to show growth at least as fast as overall U.S. ecommerce." But he added that weakening economic indicators in Europe could dampen eBay's 2012 outlook.
WHY IT MATTERS: EBay is one of the world's largest e-commerce companies. The health of its core businesses gives an idea of how overall online commerce is faring. The fourth quarter is especially important for retailers because of the holiday season.
WHAT'S EXPECTED: Analysts, on average, expect earnings of 57 cents per share on revenue of $3.32 billion, according to FactSet.
LAST YEAR'S QUARTER: EBay earned 42 cents per share on revenue of $2.5 billion in the fourth quarter of 2010. Adjusted earnings, which exclude Skype, were 52 cents per share.
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