EBay Shares Plunge After Outlook Disappoints
Ebay shares tumbled in late trading Wednesday after its profit outlook for current quarter fell far short of estimates and it handed in a full-year outlook that also disappointed.
The online auction site operator said it expects 2010 full-year revenue of between $8.8 billion and $9.19 billion, and earnings of between $1.29 and $1.34 a share.
Wall Street analysts expected 2010 revenue of $9.12 billion, and earnings of $1.67 per share.
In addition, eBay said it expects to generate a profit of between 27 cents and 29 cents a share in its current quarter, well short of the 40 cents a share that 27 analysts who follow the company had expected, according to Thomson Reuters.
The auctioneer lowered its revenue guidance for the current quarter to between $2.15 billion to $2.2 billion. Analysts' consensus stood at $2.21 billion.
Colin Gillis, an analyst at BGC Partners, called eBay's second-quarter outlook "lackluster" and said the company would have needed to raise its full-year guidance to keep the Street happy.
"The expectations for a monster quarter are not materializing," he said.
"It is a company that is still in turnaround," UBS analyst Brian Pitz said. "Given that e-commerce trends seem to be favorable, the Street probably was expecting more of a beat than they actually delivered."
Net profit in the e-commerce company's first quarter rose to $398 million, or 30 cents per share, from $357 million, or 28 cents per share, a year earlier.
On an adjusted basis, earnings were 42 cents per share. Analysts, on average, had been expecting earnings of 41 cents per share, according to Thomson Reuters.
Revenue rose 9 percent to $2.2 billion, in line with estimates. U.S. revenue was up 4 percent while international revenue jumped 13 percent.
The company was seen earning 41 cents a share on revenue of $2.18 billion, according to a consensus estimate from Thomson Reuters.
A 26 percent revenue rise from eBay's payments unit, which includes PayPal, and a benefit from currency exchange rates also helped results, eBay said.
In its marketplaces unit, revenue rose 13 percent. Gross merchandise volume, excluding vehicles, grew 24 percent in the quarter, a sharp contrast to the 16 percent drop in the year-ago quarter.
Shares of eBay were changing hands at a price more than 7 percent lower than their finish of $26.29 on the New York Stock Exchangee.
Volume had exceeded 21 million shares before the closing bell.
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—Wire services contributed to this report.