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eBay posts upbeat Q4 earnings, guidance

E-commerce giant eBay (EBAY) swung to a profit in the fourth quarter from a loss last year, helped by an income tax benefit. The results exceeded analysts’ expectations. The company guided earnings above the consensus view both for the first quarter and full year 2019 while expecting revenue to be below the Street’s view. Following this, the stock inched up over 3% in the after-market session.

Net income was $760 million or $0.80 per share compared to a loss of $2.60 billion or $2.51 per share in the previous year quarter. Non-GAAP earnings from continuing operations grew by 20% to $0.71 per share.

Net revenues rose 6% to $2.9 billion helped by a 1% rise in gross merchandise volume. In the quarter, eBay grew active buyers by 4% across its platforms for a total of 179 million global active buyers.

eBay Q4 2018 Earnings Infographic

Looking ahead into the first quarter 2019, the company expects revenue in the range of $2.55 billion to $2.60 billion and earnings from continuing operations in the range of $0.40 to $0.44 per share. Non-GAAP earnings from continuing operations are predicted to be in the range of $0.62 to $0.64 per share.

For the full year 2019, eBay predicts net revenue in the range of $10.7 billion to $10.9 billion and earnings from continuing operations in the range of $1.83 to $1.93 per share. Non-GAAP earnings from continuing operations are anticipated to be in the range of $2.62 to $2.68 per share.

Also read: eBay Q4 2018 earnings call transcript

For the fourth quarter, eBay continued strong execution of its advertising and payments growth priorities. The company experienced nearly 150% revenue growth in promoted listings, with 600 thousand active sellers promoting 200 million listings. During the fourth quarter, eBay intermediated nearly $140 million in gross merchandise volume.

The company announced the initiation of a quarterly dividend of $0.14 per share, with the first quarterly dividend to be paid on or about March 20, 2019, to shareholders of record as of March 1, 2019. eBay also reported an increase in share repurchase authorization by an additional $4 billion with no expiration, with an expected 2019 share repurchase of about $5 billion.

eBay expects to exit 2019 with cash and investments of about $3.5 billion. The company expects to return about $7 billion to shareholders through dividends and repurchases over the next two years, with about $5.5 billion in 2019 and about $1.5 billion in 2020.

eBay has been struggling to keep pace with the mightier rivals Amazon (AMZN) and Walmart (WMT). The company has remained a straggler in the highly competitive e-commerce space. Amazon will be reporting its results for the fourth quarter on Thursday after the closing bell. Walmart will be releasing results for its most recent quarter on February 19 before the opening bell.

Shares of eBay ended Tuesday’s regular session down 0.97% at $33.69 on the Nasdaq. The stock has fallen over 17% in the past year while it has risen over 25% in the past three months.

 

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Tags: Nasdaq
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