eBay Inc (NASDAQ:EBAY) released its earnings numbers for the three months through June this afternoon, Wednesday July 16, after the market closed on Wall Street. The company showed earnings per share of $0.69 in the report on revenue totaling $4.4 billion. On today’s market shares in the online marketplace operator were depressed by nervous traders. The company’s stock lost a fraction for the full day to close at $50.70.
Before the release of these numbers analysts following eBay Inc (NASDAQ:EBAY) were looking for the company to report earnings of 68 cents per share for the three month period. The quarter, which eBay records as its second of the fiscal year, was expected to bring in $4.4 billion in revenue at the company. In the same three months of last year the company earned 63 cents per share on revenue totaling $3.9 billion.
eBay plays catch up on all fronts
eBay Inc (NASDAQ:EBAY) spent much of the last decade falling behind Amazon.com Inc. (NASDAQ:AMZN) in the online retail market, and the company is spending its time trying to offer service that can stand alongside the unquestioned king of internet retail. The company recently introduced a service that allows users to collect their purchase from a location in their city and is pushing aggressively into Europe.
Growth at the company, it’s clear from this afternoon’s report, is being led by its Paypal payments processing subsidiary. That business, which Elon Musk helped to found, is attracting users like no other eBay Inc (NASDAQ:EBAY) property and it’s become profitable enough that some investors have called for it to be spun off on its own in order to release value caught up in it.
eBay Inc (NASDAQ:EBAY) stock has suffered from several developments this year. The company’s shares have lost more than 7.5% of their value since January 1.
A growing market conceals eBay weakness
eBay Inc. (NASDAQ:EBAY) has managed to show better than expected results in most of its most recent reports because the business it’s in is a massive grower. Almost every company in the e-commerce sphere is benefiting in the bulge in the market. The era of massive growth will be over sooner rather than later, however, and once the market becomes competitive in a more stable way a more rigorous test of quality will begin.
Amazon.com Inc. (NASDAQ:AMZN) is investing so heavily in price cuts and service improvement that the company doesn’t even make a reliable profit. Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) have both become prime contenders for entry into the e-commerce market, and unexpected surprises are surely ahead for the company.
A strong e-commerce market is what’s needed to offer growth to eBay Inc (NASDAQ:EBAY), but when the tide turns the company may not have what it takes to hold its market position. More aggressive service expansion is needed to increase the company’s brand position, and more competent handling of the firm’s cash. eBay recently repatriated a bunch of cash from overseas, making it clear that the company is not all that cash-rich at home.