Earnings of e-commerce giant eBay (EBAY) dropped sharply in the first quarter, despite an increase in revenues, even as it continues to lose market share to Amazon (AMZN). The company, which recently laid out strategies to combat the increasing competition in the retail space, announced full-year guidance below consensus estimates.
In the hectic selloff that followed the earnings release, eBay shares fell more than 5% and continued to lose in the early trading hours on Thursday.
First-quarter earnings fell 58% to $0.40 per share, owing mainly to higher expenses and tax-related charges. Adjusted earnings, excluding one-time items, grew 9% annually to $0.53 per share. At $2.58 billion, revenues advanced 12% from the first quarter of 2017, aided by a marked growth in merchandise volumes.
During the quarter, there was a 4% increase in the number of active buyers across all the retail platforms of the San Jose, California-based company.
“In Q1 we drove good growth and made further progress with our multi-year effort to transform our customer experience and sharpen the eBay brand,” said CEO Devin Wenig.
During the first quarter, eBay repurchased around $1 billion shares. As part of its initiatives to stay relevant in the highly competitive sector, the company rolled out an augmented reality shipping tool to make shopping easier for customers. eBay also announced the acquisition of the Japan operations of Giosis, expanding its presence in that country’s lucrative e-tail market.
eBay shares fell more than 5% following the announcement and continued to lose in the early trading hours Thursday
Looking ahead, eBay expects revenues in the range of $2.64 billion to $2.68 billion for the second quarter. It expects earnings from continuing operations in the range of $0.33 per share to $0.37 per share, and adjusted earnings between $0.50 per share and $0.52 per share.
Full-year revenues are forecasted in the $10.9-$11.1 billion range. The company sees earnings from continuing operations to be between $1.65 per share and $1.75 per share in 2018, and adjusted earnings per share in the range of $2.25 to $2.30.
Amazon is scheduled to report its first quarter earnings after the market-hours on Thursday. China-headquartered online marketplace Alibaba (BABA) will be announcing results for its latest quarter on May 4.