EBay Falls After Outlook Misses Analysts Estimates (Update1)
By Beth Jinks and Joseph Galante
Jan. 21 (Bloomberg) -- EBay Inc., the world's biggest Internet auctioneer, tumbled in late trading after it projected first-quarter sales and profit that were below analysts estimates.
EBay, based in San Jose, California, fell 6.5 percent to $12.42 at 5:10 p.m. New York time, after the announcement. The shares gained 73 cents, or 5.8 percent, to $13.28 in regular Nasdaq Stock Market composite trading. They tumbled 58 percent last year.
First-quarter earnings will be 32 cents to 34 cents a share, EBay said today in a statement, compared with 39 cents, the average estimate of 17 analysts surveyed by Bloomberg. Revenue will be $1.8 billion to $2.05 billion, compared with an average estimate of $2.1 billion.
Sales fell 6.6 percent to $2.04 billion in the fourth quarter, EBay's first quarterly revenue decline, as sellers cut prices and the company boosted promotions to lure more holiday shoppers online amid the U.S. recession. Earnings also were hurt by foreign-currency changes, including the stronger U.S. dollar.
Net income dropped 31 percent to $367.1 million, or 29 cents a share, from $530.9 million, or 39 cents, a year earlier, EBay said in the statement. Excluding some items, EBay earned 41 cents a share, beating the 39-cent average of 24 analysts surveyed by Bloomberg.
Kijiji, StubHub
Gross merchandise volume, the value of all goods that users sold on EBay’s sites excluding vehicles, fell 12 percent to $11.5 billion, the second drop in the company’s history.
Revenue from EBays marketplaces businesses, including its namesake auction and fixed-price Web site, Kijiji online classifieds, and ticket re-seller StubHub fell 16 percent to $1.27 billion in the fourth quarter, hurt by the slow-down of the e-commerce market globally, EBay said.
EBay's Web sites attracted fewer new visitors compared with a year earlier. About 55 percent of marketplaces revenue came from outside the U.S., the company said.
Payments revenue rose 11 percent to $623 million in the quarter, as more companies and customers opted to use EBay's PayPal Internet unit. Active registered accounts climbed 23 percent to 70 million.
Payment income was boosted by the online-credit service Bill Me Later, which EBay agreed to buy in October for $945 million. Bill Me Later gives users the option for deferred payments, allowing PayPal to make more money on transactions by avoiding fee payments to credit-card companies and charging interest on credit transactions.
Revenue from its Skype Internet telephone unit climbed 26 percent to $145 million, EBay said. Skype added 35 million users in the quarter, and now has more than 405 million.
Source: Bloomberg