Enlarge imageBy Alexandria Sage
SAN FRANCISCO (Reuters) - EBay
Investors had warmed to the idea of a comeback by the global e-commerce and payments company, which is overhauling its main marketplaces division. Since January, the company's stock had shot up 79 percent after years of languishing.
But its forecast on Wednesday put a dent in that confidence, suggesting a fix for eBay would come more slowly.
For the fourth quarter, eBay sees adjusted earnings to range between 38 cents to 40 cents per share. Wall Street had been expecting 40 cents per share.
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EBay expects fourth-quarter revenues to range between $2.20 billion (1.3 billion pounds) to $2.30 billion, versus Wall Street's estimate of $2.57 billion. Some of the shortfall comes from its plans to sell control of Web telephone company Skype, in a deal expected to close in the coming weeks.
"EBay has a long history of providing very conservative guidance and then breaking it, but people were hoping for evidence of much more recovery," said Bernstein Research's Jeffrey Lindsay.
EBay also faces a fierce price war among retailers on- and off-line during the holidays. Wal-Mart Stores
EBAY POINTS TO EARLY IMPROVEMENTS
The company said it was cautiously optimistic as the holiday season approaches and pointed to signs of improvement, including stronger-than-expected gross merchandise volume, which measures the dollar amount of all goods sold on eBay.
"EBay has stabilized and is beginning to show some positive trends," said Chief Executive John Donahoe. "Simply put we're seeing our turnaround efforts begin to pay off."
Fixed-price, gross merchandise volume grew 37 percent in the quarter, eBay said. The company has been concentrating on fixed-price sales, which consumers find convenient, and moving away from auctions, where GMV declined 12 percent.
EBay, which also owns online payments service PayPal, said third-quarter net profit fell to $350 million, or 27 cents per share, from $492 million, or 38 cents per share, a year earlier.
On an adjusted basis, earnings were 38 cents per share, a penny above the average analyst forecast, according to Thomson Reuters I/B/E/S.
Revenue was $2.2 billion, the San Jose, California-based company said, compared to the Wall Street expectation of $2.14 billion. In the marketplaces division, revenues fell 1 percent. They rose 15 percent at PayPal and 29 percent at Skype.
Last month a group led by top Internet financiers agreed to buy a 65 percent stake in Skype for $1.9 billion. Skype's founders are suing eBay and the investor group.
EBay shares fell to $23.66 after-hours from its close of $25.03.
(Additional reporting by David Lawsky and Lisa Baertlein; editing by Michele Gershberg and Leslie Gevirtz)
