Ebay Tumbles due to Soft Outlook

On Wednesday, shares of global commerce company eBay Inc. (NASDAQ:EBAY) tanked more than 7 percent after the company beat its third quarter earnings, but had soft guidance. EBay reported EPS of $0.45 on revenues of $2.22 billion compared to analysts’ expectations of $0.44 on $2.19 billion revenues.

“In Q3 we delivered good top- and bottom-line financial results, led by consistent performance across our business,” said Devin Wenig, President and CEO of eBay Inc. “We continued to transform the shopping experience on eBay, delivered more personalization capabilities and began to activate our updated brand messaging.”

In the third quarter, eBay added over one million active buyers across its platforms, to a total of 165 million global active buyers. Underlying total eBay Inc. performance, the Marketplace platforms delivered $19.0 billion of GMV and $1.8 billion of revenue. Marketplace revenue was up 5% on an FX-Neutral basis and 2% on an as-reported basis, driven by GMV growth of 4% on an FX-Neutral basis and 2% on an as-reported basis as well as growth in Marketing Services & Other revenue.

StubHub had another strong quarter with GMV of $1.1 billion, up 23%, and revenue of $263 million, up 32%, aided by strength across concerts, theater and baseball as well as the continued benefit from ongoing product innovation. The Classifieds platforms delivered another quarter of good performance with revenue of $197 million, up 14% on an FX-Neutral basis and 11% on an as-reported basis, primarily driven by the Automotive and Real Estate verticals across several key geographies.

Outlook of Fourth Quarter of 2016

The company expects net revenue between $2.36 billion and $2.41 billion, representing FX-Neutral growth of 4% – 6%, with non-GAAP earnings per diluted share from continuing operations in the range of $0.52 -$0.54 and GAAP earnings per diluted share from continuing operations in the range of $1.05 – $1.15.

Outlook for the Full Year of 2016

The company expects net revenue between $8.95 billion and $9.0 billion, representing FX-Neutral growth of 6% – 7%, with non-GAAP earnings per diluted share from continuing operations in the range of $1.85 – $1.90and GAAP earnings per diluted share from continuing operations in the range of $2.22 – $2.32.

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