eBay Meets Earnings Expectations, But Disappoints On Outlook

Second quarter performances for eBay were somewhat tepid — though mostly in line with investor expectations. The eCommerce marketplace clocked in with net income of $493 million, or 45 cents per share, which was just about what The Street was expecting to see.  Revenue of $2.3 billion also met expectations, but indicates growth of only 4 percent since this time last year.

“During the past two years, we have made significant progress to modernize eBay and drive growth by improving the customer experience, creating a product catalog that covers more than half of our inventory, and sharpening the eBay brand,” said eBay President and CEO Devin Wenig in a statement released alongside earnings.

But eBay stocks saw a price decline on the day, as revenue next quarter is projected to be weak.  The firm is anticipating a decline of between $2.35 and $2.39 billion during Q3 — a bit above analyst estimates of $2.32 billion. Earnings guidance — which eBay is predicting to fall in the range of 46 cents and 48 cents per share — managed to hit the lower bound of expert projections.

All in all, analysts are looking for eBay to bring down $9.4 billion in revenue this year, in line with eBay’s issued guidance on Thursday. Last year, the firm reported total revenue of $9 billion, a five percent increase from 2015.

As for the other key figures, gross merchandise volume came in at $21.5 billion during Q2 — a 3 percent increase from this time in 2016.  GMV grew 5 percent last quarter. Revenue growth was also somewhat sluggish among the eBay family of brands: Marketplace, StubHub and Classifieds. Transaction revenues for Marketplace and StubHub were up 5 percent and 1 percent, respectively.

As for what’s next — Wenig signaled the firm’s intentions to push harder into global eCommerce. That effort began with a massive investment (alongside Microsoft and Tencent) in Indian eCommerce marketplace Flipkart. eBay now plans to consolidate eBay India under Flipkart — a firm currently valued at over $11 billion.

“We continue to believe there are significant opportunities to expand our business inorganically through our M&A and partnership strategy,” Wenig said in an April conference call.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Click to comment