• Rajasthan

    Cong 99
    BJP 73
    RLM 3
    OTH 24
  • Madhya Pradesh

    Cong 114
    BJP 109
    BSP 2
    OTH 5
  • Chhattisgarh

    Cong 68
    BJP 16
    JCC 6
    OTH 0
  • Telangana

    TRS-AIMIM 95
    TDP-Cong 21
    BJP 1
    OTH 2
  • Mizoram

    MNF 26
    Cong 5
    BJP 1
    OTH 8

* Total Tally Reflects Leads + Wins

EBay’s disappointing forecast fuels stock decline

By: | Published: January 28, 2016 8:02 AM

EBay Inc forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business.

EbayEBay Inc forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business.

Shares of the retailer fell more than 12 percent to $23.51 in extended trading on Wednesday.

The online retailer, which faces intense competition from e-commerce giant Amazon.com Inc, has also been hit by brick-and-mortar rivals like Wal-Mart Stores Inc that are aggressively boosting their online presence.

The company said its gross merchandise value, or the total value of all goods sold on its site, rose 5 percent after accounting for foreign exchange impact.

Under its new chief executive Devin Wenig, eBay has returned to its roots, refocusing on unique inventory and smaller sellers.

“I want to grow our metrics faster but I am very pleased with where we are,” said Wenig in an interview with Reuters.

The company forecast full-year adjusted profit of $1.82-$1.87 per share and revenue of $8.5 billion-$8.8 billion.

That was lower than analysts’ average expectation of $1.98 per share in profit and $8.99 billion in revenue, according to Thomson Reuters I/B/E/S. In 2015, it reported $8.6 billion in revenue.

Its forecast for first-quarter adjusted profit of 43-45 cents per share and revenue of $2.05 billion-$2.10 billion also missed analysts’ average estimates.

In its second quarter without PayPal, eBay’s revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier during the crucial holiday shopping season and in line with analysts’ average expectations.

Online sales in the United States jumped 9 percent to $105 billion in the November-December holiday period, according to the National Retail Federation.

“While not a direct competitor in every respect, the growth of (Amazon’s) successful Prime service has locked more customers into using its services and sites in a way that is unhelpful to eBay,” said Carter Harrison, a retail analyst at research firm Conlumino.

EBay began testing a paid shipping membership program in Germany last year, responding to shoppers’ increased demand for faster delivery.

Wenig on Wednesday said there were “no plans for now” to expand the program.

EBay derives nearly 60 percent of its revenue from overseas and faces headwinds from a strong dollar.

Excluding the effects of currency changes, eBay’s revenue grew 5 percent in the quarter.

The company’s net income fell to $477 million, or 39 cents per share, from $1.02 billion, or 82 cents per share.

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