eBay, one of the leading online e-commerce marketplaces, experienced a decline in shares during late trading. The drop was a result of the company’s disappointing forecasts for the upcoming December holiday quarter. eBay specifically highlighted signs of weakness in its European business as a contributing factor.
In terms of financial performance, eBay reported a revenue of $2.5 billion for the third quarter, marking a 5% increase that aligned with Wall Street estimates. On an adjusted basis, the company surpassed consensus estimates by three cents, earning $1.03 per share. Under generally accepted accounting principles, eBay’s earnings were recorded at $2.46 per share. Although the gross merchandise value experienced a 2% increase to reach $18 billion, it remained flat when adjusted for currency fluctuations.
CEO Jamie Iannone expressed satisfaction with the overall delivery of the company during the quarter. In an interview with _, he mentioned the impressive resilience of eBay’s business and the introduction of innovative features. Notably, sellers have been leveraging a feature that utilizes artificial intelligence to assist in writing product descriptions. eBay is currently testing a version that would allow sellers to obtain the same benefit from simply uploading a photograph.
Additionally, Iannone highlighted substantial growth in eBay Live, the company’s live-events platform. The platform hosted 1,000 events over the past quarter, indicating a four-fold increase from the previous June quarter. Furthermore, eBay’s first-party ad platform witnessed robust growth, generating $345 million in revenue, a notable 39% increase.
Stay tuned for further updates on eBay’s performance and strategies as it navigates through the upcoming holiday season.
eBay’s Fourth-Quarter Outlook Disappoints Market
Management’s underwhelming forecast raises concerns for eBay’s fourth-quarter performance.
eBay recently revealed its fourth-quarter revenue projection, disappointing both investors and analysts. The company expects revenue to range from $2.47 billion to $2.53 billion on a currency-adjusted basis, with an estimated decline of 1% to a marginal 2% increase. Meanwhile, market estimates had indicated a more optimistic figure of $2.6 billion in revenue. Alongside this, projected profits stand at $1 to $1.05 per share, aligning with street expectations.
As a result, eBay’s shares took a significant dip, declining by 6.7% to a value of $38.05 during late trading hours.
According to Devin Wenig, eBay’s CEO, the weakness experienced in the United Kingdom and Germany during September and October contributed to the less-than-ideal projections. It should be noted that over 50% of eBay’s revenue comes from international markets.
Pleasingly, the company has displayed resilience compared to other sellers, primarily due to its emphasis on offering used and refurbished goods.
A positive aspect for shareholders is eBay’s commitment to returning cash. In the latest quarter alone, the company has repurchased $651 million worth of stock. Wenig affirmed that eBay aims to deliver 125% of its free cash flow back to shareholders by 2024. To date, the company has returned a significant $5.2 billion through dividends and buybacks since the beginning of 2022.