By Jeremy C. Owens and Wallace Witkowski
Revenue declines, but was above Wall Street expectations
EBay Inc. shares jumped more than 6% in premarket trading Thursday, after the online marketplace beat expectations for earnings and revenue and predicted an in-line holiday quarter.
EBay (EBAY) reported late Wednesday a third-quarter net loss of $70 million, or 13 cents a share, compared with earnings of 43 cents a share in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1 a share, compared with 90 cents a share in the year-ago period.
Revenue declined to $2.38 billion from $2.5 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of 93 cents a share on revenue of $2.32 billion. After closing with a 4.4% decline at $38.06, shares were trading for close to $41 in the extended session Wednesday.
"I'm proud of our team and community for remaining resilient in the face of a challenging macroeconomic environment," Chief Executive Jamie Iannone said in a statement.
Macroeconomic concerns have weighed on eBay, as pandemic gains for e-commerce companies come back to earth and rising inflation puts a crimp in consumers' budgets. The stock has fallen 42.5% in the past year, while the S&P 500 index has dropped 19.1%, and that spread has widened in the past three months, with eBay shares falling 21.2% and the S&P declining 5.8%.
"Macro headwinds such as record-high [inflation], rising interest rates, supply chain disruptions, geopolitical conflict, and adverse [foreign exchange] have all seemingly worsened since the [previous earnings report], continuing to weigh on discretionary spend levels and broader e-commerce," JP Morgan analyst Doug Anmuth wrote Monday, while reducing his price target on the stock to $43 from $50 and maintaining a neutral rating.
"Some may view eBay as defensive/value-oriented given the majority of GMV is preowned (Non-New In-Season), but we generally view most items and the focus categories it has leaned into (i.e. luxury watches, designer handbags, sneakers, & trading cards) as discretionary in nature and believe they could be challenged in a recessionary environment," he continued.
EBay forecast adjusted earnings of $1.03 to $1.09 a share on revenue of $2.42 billion to $2.5 billion for the fourth quarter. Analysts had estimated $1.05 a share on revenue of $2.49 billion for the fourth quarter, according to FactSet.
-Jeremy C. Owens
(END) Dow Jones Newswires
November 03, 2022 08:15 ET (12:15 GMT)
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