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Msg  191 of 191  at  2/23/2023 3:58:40 PM  by

jerrykrause


Why EBay Stock Is Sliding Despite Solid Earnings

Why EBay Stock Is Sliding Despite Solid Earnings
 

Shares of eBay are sliding despite the company having reported fourth-quarter financial results that edged Street estimates, along with first-quarter sales guidance that topped expectations.

EBay (ticker: EBAY) declined to provide financial guidance for the full year, citing the uncertain economic environment. That is a change in policy for eBay, which typically provides the Street with a projection for full-year results—and one that the Street isn't going to like.

In premarket trading Thursday, eBay was 5.5% lower at $45.21.

"We had a solid quarter, and remained resilient despite the challenging operating environment," eBay CEO Jamie Iannone said in an interview with Barron's. He notes that the company saw strength in what the company calls "focused categories," like luxury handbags and auto parts.

For the quarter the online retail marketplace posted revenue of $2.5 billion, down 4% from a year ago, but at the high end of the company's guidance range of $2.42 billion to $2.5 billion and above the Street consensus at $2.47 billion. Gross merchandise volume in the quarter was $18.2 billion, down 12% from a year ago, or 6% lower adjusted for currency.

The company had 134 million active buyers in the quarter, down 9% from a year earlier.

For all of 2022, eBay posted revenue of $9.8 billion, down 6% as reported, or 4% lower adjusted for currency. GMV was $73.9 billion, down 15%, or 11% adjusted for currency.

EBay provided solid first-quarter guidance. It projects revenue of $2.46 billion to $2.5 billion, flat to up 2% from a year ago, and above the Street consensus at $2.37 billion. The company sees adjusted profits for the quarter of $1.05 to $1.09 a share—at the middle of the range. That's a penny better than the current Street consensus at $1.06 a share.

Iannone said that eBay has seen some modest pressure on average selling prices in luxury-goods categories, but notes that transaction counts in those areas have improved. He also noted that the company has seen some pressure in European business from higher energy prices.

EBay also boosted its quarterly dividend by 14% to 25 cents quarterly. The company bought back $300 million of its common stock in the quarter.

 


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