EBay stock sinks after lackluster Q4 guidance, election distraction
EBay reported better-than-expected earnings for the third quarter, but the results were overshadowed by a disappointing forecast for the current period.
Shares of eBay slumped about 9% in extended trading on Wednesday after the online marketplace issued guidance for the fourth quarter that fell short of Wall Street's expectations.
Here's how the company did in the third quarter:
Earnings: $1.19 per share vs. $1.18 per share expected by LSEG
Revenue: $2.58 billion vs. $2.55 billion expected by LSEG
For the current quarter, eBay predicted revenue to between $2.53 billion and $2.59 billion, which would represent a 1% decline to a 1% increase year over year. The guidance trailed the average analyst estimate for fourth-quarter revenue of $2.65 billion, according to StreetAccount.
The company also said it expects $1.17 to $1.22 in adjusted earnings per share in the fourth quarter. The top end of the range is in line with consensus estimates of $1.22 per share.
EBay has faced increased competition in e-commerce from rivals like Amazon, Walmart and Etsy, as well as low-cost upstarts Temu and Shein, which both have ties to China. To keep buyers and sellers returning to its site, the company has leaned into so-called "focus categories," such as collectible sneakers, used luxury goods and auto parts. It'd also announced artificial intelligence tools that provide personalized recommendations for shoppers and streamline the creation of seller listings.
EBay CEO Jamie Iannone said in an interview following the earnings report that the weak guidance was due to a number of "one-time factors." He cited the prevalence of hurricanes at the beginning of the quarter and shoppers being distracted in the run-up to the U.S. presidential election in November. He also pointed to the shorter holiday shopping season, which has five fewer days between Thanksgiving and Christmas this year compared with last year.
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