EBay Raises Forecasts a Year After PayPal Split

  • Board approves $2.5 billion buyback; StubHub sales jump 40%
  • Company says marketplace volume climbs 4% to $20.9 billion

EBay Inc. raised revenue and profit forecasts Wednesday, as efforts to lure new shoppers to the online marketplace gain traction one year after the company split from its PayPal payments business. The stock climbed as much as 8.4 percent in extended trading.

Key Points

  • Full-year revenue will be $8.85 billion to $8.95 billion, the company said in a statement. That’s up from a previous forecast of $8.6 billion to $8.8 billion. Analysts estimated $8.81 billion, according to data compiled by Bloomberg.
  • Full-year profit, excluding certain items, will be $1.85 to $1.90 a share, EBay also estimated. That compares to a January forecast of $1.82 to $1.87 a share. Analysts were looking for $1.86 a share.
  • EBay said its board approved a new $2.5 billion share buyback. The company repurchased about $500 million of its stock in the second quarter.
  • Sales in the current quarter will be $2.16 billion to $2.19 billion, EBay said. Analysts estimated $2.14 billion.
  • Adjusted profit in the third quarter will be 42 cents to 44 cents a share compared with the analysts’ average projection of 44 cents.

The Big Picture

CEO Devin Wenig is emphasizing EBay as a destination for difficult-to-find items to differentiate it from its largest rival Amazon.com Inc., which is known for quick delivery. He has said a structured data initiative aimed at improving EBay’s prominence in Google search-engine results should improve performance. The total value of goods sold on EBay has declined in the past two years while e-commerce has grown, prompting questions about whether the company can remain relevant in the face of Amazon’s expanding market share and improved online options from traditional brick-and-mortar retailers.

The Detail

  • EBay reported revenue increased 6 percent to $2.23 billion in the second quarter. Analysts estimated $2.17 billion.
  • EBay said its customer base increased to 164 million active accounts, up 4 percent from a year earlier.
  • Gross merchandise volume increased 4 percent to $20.9 billion in the second quarter from a year earlier, EBay said Wednesday in a statement.
  • Revenue from StubHub, the company’s marketplace for concert and event tickets, gained 40 percent to $225 million in the second quarter.

Street Takeaways

  • Investors are encouraged that several key metrics have returned to growth and beat expectations, said Vic Anthony, analyst at Axiom Capital Management. Concerns will linger that the pace of growth lags e-commerce overall and Amazon. "I’m not ready to jump on a table and start dancing for EBay, but it looks like they’re moving in the right direction," he said.
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