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eBay Tries to Catch Up With Rivals, Misses Second Quarter Forecasts

eBay Tries to Catch Up With Rivals, Misses Second-Quarter Forecasts

By Retuers | Updated: 26 April 2018 15:27 IST

eBay's forecast for current-quarter profit and revenue missed Wall Street estimates as the e-commerce company invests heavily to beat the rising competition from the likes of Amazon.com and Alibaba Group Holding.

eBay's total operating expenses rose 16.1 percent to $1.44 billion (roughly Rs. 9,600 crores) in the first quarter. The company's shares were down 4.5 percent at $39.11 (roughly Rs. 2,600) in extended trading.

The company has been trying to woo shoppers by refurbishing the homepage of its website and making it easy for searches as well as by ensuring the authenticity of premium products that it sells.

"We are actively investing to build our product and capabilities related to intermediated payments and improving the customer experience," CFO Scott Schenkel said on a post-earnings call. "We expect the level of investment to increase over time."

eBay said it expects net revenue for the second quarter to be between $2.64 billion and $2.68 billion. Analysts were expecting it to be $2.69 billion.

The company forecast second-quarter earnings per share in the range of 50 cents to 52 cents per share. The midpoint of the range came in below the average analyst estimate of 52 cents.

In the reporting quarter, 171 million active buyers used the company's website, missing the average analyst estimate of 173.4 million buyers, according to data and analytics firm Factset.

However, its gross merchandise volume - the total value of all goods sold on its websites - rose 13 percent to $23.6 billion (roughly Rs. 1.58 lakh crores), brushing past the analyst target of $23.1 billion, according to FactSet.

The company's net income fell to $407 million (roughly Rs. 2,700 crores), or 40 cents per share, in the quarter ended March 31, from $1.04 billion, or 94 cents per share, a year earlier when it booked a $695 million tax gain.

Revenue rose to $2.58 billion (roughly Rs. 17,200 crores) from $2.30 billion.

Excluding one-time items, the San Jose, California-based company earned 53 cents per share, in line with analysts' estimates of 53.

© Thomson Reuters 2018

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