EBay Shares Slide As Q4 Revenue Guidance Misses Expectations Despite Earnings Beat

EBay Inc. EBAY shares are trading lower Thursday. The e-commerce company reported third-quarter results and issued fourth-quarter and fiscal year 2024 revenue guidance below estimates.

• Revenue growth of 3% year over year on an as-reported basis and an FX-Neutral basis to $2.58 billion, beating the consensus of $2.54 billion.
• Gross Merchandise Volume reached $18.3 billion, marking a 2% increase on an as-reported and 1% on FX-neutral basis.
• Adjusted operating margin stood at 27.2% versus 26.4% a year ago. Adjusted EPS of $1.19 beat the consensus of $1.18.
• The company generated $755 million in operating cash flow and $646 million in free cash flow in the quarter.
• As of Sept. 30, the company's cash, cash equivalents, and non-equity investments totaled $5.8 billion.
• eBay returned $881 million to stockholders, comprising $750 million in share repurchases and $131 million in cash dividends in the quarter.

“Our Focus Categories and geo-specific investments are driving momentum in the business, and we are leveraging the power of Al to create magical innovations for our customers,” Jamie Iannone, Chief Executive Officer, said.

 “Solid execution within our strategic initiatives drove continued GMV growth amid a dynamic macro environment, and we are continuing to invest for the long-term while generating significant earnings growth and capital returns for shareholders.”

Buyback: In Q3 2024, the company repurchased around 13 million shares worth $750 million.

As of Sept. 30, approximately $1.2 billion remained authorized for further repurchases.

Dividend: EBay's board declared a 27-cent per share cash dividend, payable on Dec. 13, to stockholders of record as of November 29, 2024.

Outlook: EBay expects fourth-quarter revenue of $2.53 billion-$2.59 billion (-1% to +1% FX-Neutral). Compare that to the consensus of $2.65 billion, and adjusted EPS of $1.17-$1.22 compared to the consensus of $1.22.

The company expects revenue of $10.23 billion-$10.29 billion. The consensus is $10.32 billion and adjusted EPS of $4.80 – $4.85 compared to a street view of $4.83.

Investors can gain exposure to the stock via ProShares Online Retail ETF ONLN and Global X E-commerce ETF EBIZ.

Price Action: EBay shares traded lower by 9.95% at $56.40 premarket at the last check Thursday.

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