EBay CEO cites ‘uncertainty’ for weak 4Q outlook


Fri, Oct 18, 2013 - Page 15

EBay Inc said on Wednesday the growth rate of e-commerce in the US is slowing as it delivered a weaker than expected profit and revenue outlook for the current quarter through December.

The company’s third-quarter earnings edged past analysts’ expectations, but revenue rose just short of estimates.

Shares of EBay Inc’s fell 4.9 percent to US$50.90 in after-hours trading.

The San Jose, California-based company said US e-commerce had been growing at an annual 15.5 to 16 percent pace, but it slowed to about 13 percent by the July to September quarter.

That softening, plus a weaker US dollar affecting its overseas transactions, led the company to say its annual profit and revenue would come in at the low range of its outlook.

EBay chief executive officer John Donahoe suggested that the 16-day partial US government shutdown was partly to blame, citing “uncertainty about the government.”

“Those uncertainties, frankly, we can’t control,” he told analysts on a conference call.

EBay’s revenue prediction for this quarter through December predicts adjusted earnings of US$0.79 to US$0.81 per share, below the US$0.83 analysts were looking for.

The company also said it expects quarterly revenue of US$4.5 billion to US$4.6 billion, while analysts were estimating revenue of US$4.64 billion.

Its annual outlook for adjusted earnings between US$2.70 and US$2.75 per share and revenue of US$16 billion to US$16.5 billion was unchanged.

For the quarter through last month, EBay’s net income grew 15 percent to US$689 million, or US$0.53 per share, from US$597 million, or US$0.45 per share, a year ago.

Revenue rose 14 percent to US$3.89 billion, thanks to increasing mobile transactions in its online marketplaces EBay and StubHub.

It also reported growth in the number of customers using its PayPal payments processor.

Revenue was slightly below the US$3.91 billion analysts were looking for.

Excluding special items, adjusted earnings came to US$0.64 per share, slightly better than expected by analysts polled by FactSet.