eBay Shares Slide on Earnings miss and weaker Outlook

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eBay Inc. (NASDAQ: EBAY)reported its second quarter financial results and missed estimates as well as provided a weaker outlook, sending shares 5% lower during Wednesday’s after hours.

Shares continued to fall into Thursday’s pre-market hours, as they were trading 8.1% lower.

For the second quarter, the e-Commerce giant reported revenue of USD 2.6 Billion USD, increasing 9% year over year, but missed analysts’ estimates of USD 2.73 Billion. eBay reported an adjusted EPS of USD 53 cents, also missing analysts’ estimates of USD 56 cents.

Revenue was primarily driven by the growth of its gross merchandise volume (GMV), which increased by 10% to USD 23.6 Billion.

eBay continues to lag behind its competitors, as the Company’s active buyers only grew by 4% to 175 Million global active buyers. eBay’s Marketplace platform delivered USD 2.1 Billion in revenue and USD 22.6 Billion of GMV.

eBay’s other segments, Stubhub reported revenue of USD 246 Million, up 4% and its Classifieds platform reported revenue of USD 259 Million, increasing 18%.

"In Q2 we continued to execute our strategy, making improvements to the core eBay experience. At the same time, we pursued significant opportunities in advertising and payments,” said Devin Wenig, President and Chief Executive Officer of eBay Inc. "As we look ahead to the second half of 2018, we expect acceleration in our core business and continued strong growth in earnings."

eBay’s biggest competitor, Amazon.com Inc. (NASDAQ: AMZN) is dominating the e-Commerce market, which has caused eBay’s growth to slow down. In efforts, eBay tried different methods to boost its marketplace to attract in new customers.

eBay has been competing against Amazon in the recent years with its promotions for users. In an effort to gain market share, eBay has offered sitewide discounts and no fees on top of free shipping for certain products. The Company also tried to compete with Amazon right before its Prime Day by offering discounts, although Amazon smashed through sales by selling over 100 Million products.

According to data by eMarketer, eBay is expected to lag behind Amazon significantly, as the research forecasts that Amazon will control nearly half of the online spending revenue in the U.S. this year. eBay is second, but only projected to contribute to 6.6% of the spending.

For the third quarter, eBay forecasts revenue between USD 2.64 Billion and USD 2.69 Billion on non-GAAP EPS between USD 54 cents to USD 56 cents. For the fiscal year 2018, the Company projects revenue between USD 10.75 Billion and USD 10.85 Billion on non-GAAP EPS between USD 2.28 to USD 2.32.

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