eBay Inc Stock Plummets On Weak Guidance After Earnings Beat

eBay Inc Stock Plummets On Weak Guidance After Earnings Beat

eBay released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 45 cents per share on $2.217 billion in revenue. Analysts had been expecting earnings of 44 cents per share on $2.18 billion. In last year’s third quarter, the online auction firm reported 43 cents per share in earnings on $2.1 billion in revenue.

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eBay’s profits shrink

eBay’s GAAP earnings fell to 36 cents per share or $418 million from 45 cents per share or $509 million in the year-ago quarter. The company moved $20.1 billion worth of gross merchandise volume during the third quarter, representing a 5% increase on a currency-neutral basis and a 3% increase on a reported basis.

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eBay added more than 1 million active buyers across all of its platforms to bring its total active user buyer base to 165 million globally. The company’s Marketplace platforms moved $19 billion in gross merchandise volume and raked in $1.8 billion in revenue. Revenue for the Marketplace segment ticked upward 5% on a currency-neutral basis and 2% on a reported basis driven by a 4% increase in gross merchandise volume on a currency-neutral basis or 2% on a reported basis.

StubHub’s gross merchandise volume grew 23% to $1.1 billion, while its revenue increased 32% to $263 million. eBay noted strength in concerts, theater and baseball, plus continuing benefits from ongoing innovation in its products. The company’s Classifieds platforms recorded a 14% increase in revenue on a currency-neutral basis, bringing it to $197 million, with the Automotive and Real Estate sections seeing the greatest strength.

“In Q3 we delivered good top- and bottom-line financial results, led by consistent performance across our business,” eBay President and Chief Executive Officer Devin Wenig said in a statement. “We continued to transform the shopping experience on eBay, delivered more personalization capabilities and began to activate our updated brand messaging.”

eBay repurchased $500 million worth of its shares during the third quarter.

eBay provides weak holiday quarter outlook

eBay management expects the company to report adjusted earnings of 52 cents to 54 cents per share, which came up light of Wall Street’s projection of 54 cents per share. They project between $2.36 billion and $2.41 billion in revenue for the holiday quarter, which again is light of consensus at $2.4 billion.

Shares of eBay tumbled in after-hours trades, falling by as much as 8.27% to $29.83.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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