Ebay forecasts holiday-quarter revenue below estimates, shares fall 3%
today Oct 24, 2019
Ebay Inc forecast current-quarter revenue below Wall Street estimates on Wednesday, as it faces fierce competition from bigger rivals Amazon.com and Walmart Inc in the run-up to the crucial holiday shopping season.
Shares of the company fell 2.73% to $38.13 in extended trading as the holiday quarter typically generates a majority of its annual sales and profit.
Ebay forecast fourth-quarter adjusted profit from continuing operations in the range of 73 cents to 76 cents per share and net revenue of $2.77 billion and $2.82 billion.
Analysts on average had expected a profit of 76 cents on revenue of $2.85 billion, according to IBES data from Refinitiv.
The results follow the exit of Chief Executive Officer Devin Wenig last month, who cited differences with the company’s revamped board, which is looking to sell some of its businesses amid pressure from activist investors.
Hedge funds Elliott Management and Starboard Value have been pushing the e-commerce company to improve profitability through a wide-ranging review.
Ebay said active buyers grew 4% to 183 million in the reported quarter. However, its gross merchandise volume, which is the value of goods sold on its websites within a certain time frame, fell 4% to $21.72 billion.
The company’s net income fell to $310 million, or 37 cents per share, in the third-quarter ended Sept. 30, from $721 million, or 73 cents per share, a year earlier.
On an adjusted basis, the company earned 67 cents per share, beating the average analyst estimate of 64 cents.
The e-commerce company’s net revenue was flat at $2.65 billion, marginally beating estimates of $2.64 billion.
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