eBay announces 1Q15 earnings
eBay (EBAY) announced better-than-expected 1Q15 earnings last week. The company’s overall revenues increased on a YoY (year-over-year) basis by 4% to $4.45 billion and its adjusted earnings per share (or EPS) were $0.77 per share. eBay managed to beat analyst estimates on both these metrics. Analysts had been expecting revenues of $4.2 billion and EPS of $0.70 per share. Investors cheered eBay’s earnings, and the stock was up by 5% after the earnings announcement.
Amazon’s (AMZN) earnings announcement last week also pleased investors. Amazon’s better-than-expected results pushed its stock up by 14%. The results from these e-commerce companies suggest that the industry is in great health. Thus, we can also expect Alibaba (BABA), the largest e-commerce company in China (FXI), to produce robust earnings. Alibaba’s initial public offering was met with great response from US investors last year.
eBay’s Marketplaces growth declined
Although eBay’s results pleased investors, the company’s overall revenue growth is slowing down, as the chart above shows. Particularly, eBay’s Marketplaces revenue growth declined by a rate of 4% YoY in 1Q15, which was the first decline in many years.
Another interesting thing that emerged in 1Q15 was the first time that eBay’s Marketplaces revenues fell short of PayPal’s revenues. PayPal revenues grew YoY by 14% in 1Q15. PayPal achieved this healthy growth despite looming competition from Apple (AAPL) Pay. For more information on the competition Apple is posing, read Apple CEO calls 2015 “the year of Apple Pay.”