EBay rises after second-quarter revenue outlook tops estimate
EBAY rose after projecting revenue in the current quarter that exceeded analysts’ estimates, suggesting the e-commerce company’s efforts to boost sales after a post-pandemic slump are paying off.
Revenue will be US$2.47 billion to US$2.54 billion in the period ending in June, the company said in a statement on Wednesday (Apr 26). Analysts estimated US$2.43 billion. Sales and earnings in the quarter ended Mar 31 also beat expectations, showing that EBay is slowing down its loss of customers.
The shares increased as much as 8 per cent in after-market trading.
Chief executive officer Jamie Iannone is trying to cut costs after a boom during the pandemic fizzled out. Earlier this year, EBay announced it would cut about 500 employees or 4 per cent of its workforce.
First-quarter revenue of US$2.51 billion beat analysts’ estimates of US$2.48 billion and grew 1 per cent from a year earlier, reversing sales declines.
The San Jose, California-based company is aiming to sell more luxury items like watches to boost revenue while also offering refurbished items to appeal to price-conscious shoppers. In an effort to lure collectors, EBay provides a service to trade and authenticate trading cards, collectible sneakers and other items and has been building climate-controlled vaults to store them. In March, it announced a new “verified condition” badge for used heavy construction equipment sold on the site to assure buyers the machinery has been inspected.
Gross merchandise volume, the value of all goods sold by EBay, declined 5 per cent to US$18.4 billion in the quarter but topped analysts’ average estimate. EBay said it had 133 million active buyers in the first quarter, down 7 per cent from a year earlier.
The stock has gained almost 5 per cent so far this year, after dropping 38 per cent in 2022.
Amazon.com is scheduled to report financial results on Thursday, and investors will be watching to see if cost-cutting measures have helped profitability and whether cloud services sales growth is bottoming out. The world’s largest e-commerce company is cutting 27,000 employees after rapid expansion during the pandemic left it with too many personnel. BLOOMBERG
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