eBay Inc. (NASDAQ: EBAY) reported a 27% dip in earnings for the fourth quarter of 2019 due to higher costs and expenses despite flat top-line. However, the results exceeded analysts’ expectations. Further, the company guided full-year 2020 adjusted earnings above the consensus estimates.
Net income dropped by 27% to $558 million or $0.69 per share. Adjusted earnings increased by 15% to $0.81 per share. Revenue declined by 2% to $2.82 billion. Analysts had expected EPS of $0.76 on revenue of $2.81 billion for the fourth quarter.
Looking ahead into the first quarter of 2020, eBay expects net revenue in the range of $2.55-2.60 billion and earnings from continuing operations in the range of $0.50-0.53 per share. Adjusted earnings from continuing operations are anticipated to be in the range of $0.70-0.73 per share. The consensus estimates EPS of $0.70 on revenue of $2.64 billion.
For fiscal 2020, the company sees net revenue in the range of $10.72-10.92 billion and earnings from continuing operations in the range of $2.18-2.28 per share. Adjusted earnings from continuing operations are predicted to be in the range of $2.95-3.05 per share. The market analysts expect EPS of $2.86 on revenue of $10.92 billion for the full year.
For the fourth quarter, gross merchandise volume was $23.3 billion, down 5% on a reported basis and 4% on an FX-neutral basis. Active buyers grew by 2% across eBay’s platforms, for a total of 183 million global active buyers. The company experienced weakness in the Marketplace platforms as revenue was down in the segment, while StubHub and Classifieds platforms showed growth in revenue.
During the quarter, the company agreed to sell StubHub to viagogo for a purchase price of $4.05 billion in cash with a closing date by the end of the first quarter of 2020. Also, the company agreed to buy Cox Automotive Media Solutions as part of the eBay Classifieds Group in Australia for strengthening its local automotive offering.
The company’s board of directors declared a cash dividend of $0.16 per share of its common stock. The dividend is payable on March 20, 2020, to stockholders of record as of March 2, 2020. During the fourth quarter of 2019, the company paid cash dividends of $113 million.
eBay repurchased about $1 billion of its common stock in the fourth quarter with about $2.2 billion still remained to be authorized as of December 31, 2019. The board increased the total repurchase authorization in the first quarter of 2020 by an additional $5 billion with no expiration.