Share buybacks and lower tax rate aided bottom line
eBay (EBAY) reported better-than-expected 2Q16 bottom line results, thanks to the share buybacks that boosted the company’s bottom-line results by $0.03. eBay’s adjusted EPS (earnings per share) of $0.43 per share surpassed the analysts’ expectations by $0.01 and increased by 2% YoY (year-over-year).
In 2Q16, eBay repurchased $500 million worth of shares under its current repurchase plan. The company also approved an additional $2.5 billion share repurchase authorization.
Its revamped online marketplace allowed eBay to grow the number of active buyers on its platform both quarter-over-quarter and year-over-year. Moreover, eBay’s quarterly results got a significant boost from the strong performance of StubHub, the fast-growing ticket selling business, and a lower effective tax.
On a GAAP[1. generally accepted accounting principles] basis, eBay’s EPS came in at $0.38, up by $0.03 when compared with prior year quarter.
eBay (EBAY) generates about 60% of its gross merchandise volume and revenues from the international market and thus remains susceptible to adverse currency movements. The strong US dollar (UUP) and stand-up costs related to separation from PayPal negatively impacted eBay’s 2Q16 bottom line by $0.01.