eBay stock fell 0.51%
After eBay (EBAY) reported its 1Q18 results, its stock fell 0.51% to $40.97 on April 25. While the company posted lower-than-expected revenue in the first quarter, its earnings were in line with Wall Street expectations.
Earnings meet expectations
eBay posted adjusted EPS (earnings per share) of $0.53 in 1Q18, matching analysts’ expectations. Its earnings improved 9% YoY (year-over-year) from $0.49, and its adjusted net income grew 2% YoY to $548 million.
Revenue misses estimates
eBay generated $2.58 billion in revenue in 1Q18, flat from the sequential quarter and missing analysts’ expectation of $2.59 billion. However, its revenue surged 12% YoY from $2.3 billion. HeBay’s growth was higher than the 8.8% YoY seen in 4Q17 and 8.6% YoY in 3Q17.
Concerns over revenue growth
For the quarter ahead, eBay expects to post adjusted EPS of $0.50–$0.52. The company expects its revenue to grow 6%–8% on a currency-neutral basis in 2Q18, reaching $2.64 billion–$2.68 billion.
Meanwhile, analysts were projecting 2Q18 sales of $2.68 billion, raising concerns about the company’s revenue growth in the e-commerce market, which is dominated by Amazon (AMZN). Brick-and-mortar retailers such as Walmart (WMT) are also adding to the pressure as they enhance their digital-shopping options. In 2018, eBay anticipates adjusted EPS of $2.25–$2.30 and revenue of $10.9 billion–$11.1 billion, representing 7%–9% currency-neutral growth.