EBay projects holiday revenue that falls short of estimates
EBay issued a bleak revenue outlook for the busy holiday quarter, suggesting the company continues to struggle as it loses shoppers to larger rivals such as Amazon.com and Walmart.
Earnings per share will be US$1 to US$1.05 on revenue of US$2.47 billion to US$2.53 billion in the period ending in December, the company said on Tuesday (Nov 7). Analysts, on average, estimated a profit of US$1.05 per share on sales of US$2.6 billion.
EBay fell about 6 per cent in after-market trading. The shares were down almost 2 per cent this year till the Tuesday close, compared with the S&P 500’s 14 per cent gain.
The San Jose, California-based company, once an industry pioneer, keeps losing US market share even as overall online spending in the US continues to grow.
EBay chief executive officer Jamie Iannone is trying to sell watches and other luxury items as well as refurbished items to appeal to cost-conscious shoppers. In February, the company said it was cutting about 4 per cent of its workforce and spending more on technology to improve online features. Earlier this month, eBay opened a collectible sneaker store on Manhattan’s Canal Street that authenticates coveted brands in an effort to lure streetwear enthusiasts worried about buying fakes online.
Third-quarter profit was US$1.03 per share on sales of US$2.5 billion, basically in line with analyst estimates.
Gross merchandise volume, the value of all goods sold on eBay, increased 2 per cent to US$18 billion in the quarter, topping analysts’ average estimates of US$17.8 billion. The company said it had 132 million active buyers in the quarter, down 3 per cent from a year earlier.
Advertising revenue of US$366 million narrowly missed analysts’ estimates of US$368 million. EBay has been creating more advertising and payment products for its merchants to offset slow growth in overall consumer spending on the platform. BLOOMBERG
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