EBay beat, but in the parlance of this company's past performance, only managed to hit on one side of its historical, beat "and raise" equation.
The company reported 42 cents a share in earnings, a penny better than Wall Street expectations, on $2.2 billion in revenue, slightly ahead of the $2.18 billion consensus. That's the good news.
The problem for eBay comes with its guidance: The company looking for non-GAAP earnings for its second quarter of 37 cents to 39 cents a share.
The Street was at 40 cents and I talked to a few analysts who told me they expected that number to eek a little higher. It went in the other direction instead. The company also expects $2.15 billion to $2.2 billion in revenue.
Wall Street expected revenue to be flat to slightly higher; instead it'll be flat to marginally lower. Likewise for the full year. eBay now anticipates an EPS range of $1.63 to $1.68 a share, a mid-range slightly lower than the $1.67 consensus; revenue is right in line with the Street at $8.8 billion to $9.1 billion.
Looking at eBay's balance sheet, PayPal once again was the star performer. The unit generated $766 million in revenue, up 27 percent year over year. That's a bit better than the $754 million, or 25 percent increase that Citi's Mark Mahaney expected. The company's Marketplace Transaction Revenue was a disappointment, per Mahaney's "cheat sheet," only seeing 13 percent growth to $1.17 billion compared to his 15 percent growth or $1.19 billion projection.
Marketing Services and other revenues also disappointed, growing only 7 percent to $256 million while Mahaney expected 15 percent growth to $275 million. And finally, Active Users hit 89.5 million, a 1 percent sequential decline, and only a 1 percent year over year growth rate for the company.
That's a problem. While Mahaney was expecting 2 to 3 percent growth here, just about every analyst wanted to see a number better than 1 percent. It's disappointing.
eBay's quarter was a good one, despite some troubling signs like that Active User number. More disconcerting for eBay is the guidance. The bigger problem for this company might come tomorrow with Amazon's earnings.
If Amazon beats and raises, it'll be taken as a sign that eBay's woes might be its own, and that Amazon is accelerating at eBay's expense. If Amazon has bad news to share, it'll only extend eBay's retreat since market softness gives investors a reason to jump to the market leader, or jump from all the market players all together.
Worse for eBay: it didn't exactly manage expectations here. There's been a fair amount of optimism about this company and its shares. The 6 percent slide in its shares right now suggests a soft second quarter for eBay is taking a lot of investors by surprise.
EBay has a history of beating and raising. With this kind of optimism, "beating" isn't enough anymore. EBay needed the "raising" part, and without it, these shares are in retreat. Seems Donahoe and team might have some explaining to do.
Questions? Comments? TechCheck@cnbc.com