EBay (EBAY) Q3 Earnings Match Estimates, Revenues Beat
Zacks Investment Research | Oct 19, 2017 08:42AM ET
eBay Inc. (NASDAQ:EBAY) reported decent third-quarter 2017 results with earnings matching the Zacks Consensus Estimate and revenues beating the same by a slight margin. Pro forma earnings of 48 cents improved 6.7% year over year.
Gross revenues of $2.41 billion were up 8.7% on a year-over-year basis (up 8% on an Fx-neutral basis) and came ahead of the guided range.
Both top and bottom line growth was driven by strength across all three platforms – Marketplace, Classifieds and StubHub in the United States and internationally.
Shares, however, fell 5.9% in after-hours trading in response to the company’s weaker-than-expected fourth-quarter as well as annual earnings outlook.
At the call, management appeared impressed with the progress of the company transforming itself and the positive response of customers. eBay is leveraging on its structured data and Artificial Intelligence (AI) strength to build product catalogs, enhance mobile platform, roll out new browse inspired shopping journeys, enhance customer-to-customer (C2C) business and strengthen its brand.
It accelerated its AI efforts through structured data, personalization, image search technology and customer support effort in several areas.
In the third quarter, eBay rolled out group listings, a new way of searching that enables users to organize search results by products rather than listing. It partnered with Spring to offer a wide range of apparel and accessories through ebay.com. It has also extended its price matching program to international markets. eBay will soon launch Guaranteed Delivery program on 20 million items that arrive in three business days or less.
Overall, we remain positive on eBay’s replatforming and brand enhancement initiatives. Its unique capabilities backed by technological improvements give it an edge over competitors such as Etsy (NASDAQ:ETSY) , Alibaba (NYSE:BABA) and Facebook (NASDAQ:FB) .
However, expected results may take some time to show up due to weak global economy, slow e-commerce growth and increasing competition. Year to date, the stock has underperformed its industry, gaining only 27.9% compared with the Zacks Investment Research
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