eBay stock soars as Q2 earnings and revenue beat estimates

eBay earnings

Shares in eBay Inc. (NYSE: EBAY) rose more than 6% in after-hours trading Wednesday after the e-commerce giant posted upbeat quarterly results, despite sluggish revenue growth. The company also upped its adjusted earnings guidance for the current year.

eBay announced a strategic review of its business earlier this year amid pressure from activist investors Starboard Value and Elliott Management, saying it would focus on its online classifieds business and its ticket reselling company StubHub.

eBay shares, which are up 48% since the beginning of the year, ended the regular session down 2.23% to $39.03.

EBAY Earnings & Outlook

eBay had net income of $402 million, or $0.46 per share in the second-quarter, compared with $642 million, or $0.64 per share, in the same period last year. Excluding one-time items such as tax effects and stock-based compensation, the company earned $0.68 per share in the quarter.

On average, analysts surveyed by Refinitiv had been expecting earnings of $0.62 per share. Companywide revenue was $2.69 billion in the quarter, a 2% increase from $2.64 billion in the second-quarter of last year.

Analysts had modelled revenue of $2.68 billion, according to data compiled by Refinitiv. The company had earnings of $0.67 per share and revenue of $2.64 billion in the first-quarter of the previous year.

eBay saw active buyers grow 4% across its platforms in the second-quarter, for a total of 182 million international active buyers.

For the third quarter, EBay expects to post adjusted earnings of between $0.62 to $0.65 per share on revenue of $2.61 billion to $2.66 billion. Analysts expect the company to report adjusted earnings of $0.63 per share on revenue of $2.68 billion.

eBay forecasts earnings of between $2.70 to $2.75 per share on revenue of $10.75 billion to $10.83 billion for the full year.

eBay CEO Comments

“We remained focused on building our active buyer base, delivering outstanding customer experiences, and accelerating our growth initiatives in the second quarter,” eBay President and Chief Executive Officer Devin Wenig said in a press release.

“Managed payments continues to exceed expectations, while first party advertising is providing significant benefits to sellers, and new features are making our marketplace easier to use,” Wenig added.

eBay Inc Profile

With $95 billion in gross merchandise volume transacted in 2018, eBay’s Marketplace facilitated nearly 4% of the $2.6 trillion global online commerce market.

EBay’s strategic priorities include revitalizing its Marketplace platform by emphasizing its unique product assortment and value proposition, improving the seller and buyer experience, utilizing structured data/artificial intelligence for listing searches, promoted listing advertising, and improving its mobile commerce capabilities.

EBay partnered with Netherlands-based Adyen for payment intermediation beginning in 2018. – Warrior Trading News