EBay Earnings Top Forecasts, Outlook Is In-Line

CNBC.com with Reuters
Wednesday, 17 Oct 2012 | 7:11 PM ET

EBay reported quarterly earnings that edged past forecasts and its outlook was in-line with expectations.

David Paul Morris | Bloomberg | Getty Images

After the earnings announcement, shares of the online auctioneer fell in trading after the closing bell. (Click here to get the latest quotes for eBay.)

The company posted third-quarter earnings excluding items of 55 cents per share, up from 48 cents a share in the year-earlier period.

Revenue increased to $3.40 billion from $2.97 billion a year ago.

Analysts had expected the company to report earnings excluding items of 54 cents a share on $3.41 billion in revenue, according to a consensus estimate from Thomson Reuters.

"Not as overpowering a beat as the last couple of quarters, but they do appear on track, " said Gil Luria, an analyst at Wedbush Securities.

The company expects more than $10 billion in mobile payments volume this year, eBay CEO John Donahoe said after the earnings report. He said that company experienced the fastest growth in active users since 2007.

EBay's fourth-quarter guidance was in-line with estimates: Earnings of 66 to 69 cents a share on revenue of $3.85 billion to $4 billion. Analysts currently expect EPS of 68 cents on revenue of $3.94 billion.

Some analysts expected eBay to lift its fourth-quarter forecast by a lot, but that did not happen.

"Given that there had been a lot of momentum in eBay and PayPal's businesses, expectations may have gotten ahead of themselves, " said RJ Hottovy, an equity analyst at Morningstar.

EBay may be giving a cautious outlook for the holiday season because big retailers including Target and Best Buy are planning to match Amazon's online prices, Hottovy noted. This price tussle may put more shoppers and revenue up for grabs during the fourth quarter, he added.

"It's probably wise for eBay to err on the side of caution because of this price competition, " Hottovy added.


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