EBay's holiday-quarter profit forecast disappoints, shares fall nearly 9%
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
E-commerce firm eBay forecast profit for the crucial holiday quarter below Wall Street estimates amid ongoing macroeconomic uncertainty, sending its shares down 8.5 per cent after the bell on Wednesday.
Tariffs and changes to certain customs requirements in the U.S. have created significant uncertainty for small businesses, while concerns over escalating prices for imported goods have weighed on consumer confidence.
EBay has continued to see macroeconomic challenges across international markets, along with increased headwinds for cross-border trade into the U.S., CEO Jamie Iannone said on a post-earnings call.
The stock slide suggests that investors were not buying eBay's growth bandwidth behind the reported quarter's revenue and profit beat, said Michael Ashley Schulman, chief investment officer at Running Point Capital.
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
This service is not intended for persons residing in the E.U. By clicking subscribe, I agree to receive news updates and promotional material from Mediacorp and Mediacorp’s partners.
Loading
EBay's third-quarter revenue came at $2.82 billion, while adjusted profit was $1.36 per share, both beating Wall Street estimates of $2.73 billion and $1.33 per share, respectively.
EBay saw a "deceleration in year-over-year volume growth starting in September in key markets importing into the U.S. after the removal of the de minimis exemption," CFO Peggy Alford said on the call.
The U.S. in late August ended de minimis tariff exemptions for parcel imports and began collecting normal duty rates on all package shipments valued under $800, regardless of the country of origin or mode of transportation, a change that was expected to impact online marketplaces such as eBay.
"As commodity prices for precious metals have appreciated in recent months we've observed a notable acceleration in demand for bullion and collectible coins on eBay which may be a less durable trend," Alford added.
This year, eBay will also see a full quarter of impact from the removal of the de minimis exemption. Sellers in Japan and Canada were amongst the most impacted.
EBay forecast adjusted earnings between $1.31 and $1.36 per share for the fourth quarter, below analysts' average estimate of $1.39 per share, according to data compiled by LSEG.
It, however, sees revenue in the range of $2.83 billion to $2.89 billion for the quarter, above the estimate of $2.79 billion.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app