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eBay Stock Rose Due to Its Upbeat Q4 Results

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eBay’s fourth-quarter results

On January 29, eBay (EBAY) delivered better-than-expected fourth-quarter earnings and revenues after the market bell. eBay stock increased 1.16% to $34.08 on January 30. On a year-to-date basis, the stock gained 21.4%.

Facebook (FB) beat the earnings and revenue expectations, while PayPal (PYPL) missed on revenues in the fourth quarter. Both companies reported their earnings after the market bell on January 30.

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Earnings and revenues

eBay posted an adjusted EPS of $0.71 in the fourth quarter, which beat analysts’ expectations of $0.68 per share and the company’s guided range of $0.67–$0.69 per share. The earnings increased 20.3% YoY (year-over-year) due to top-line growth and share buybacks.

The company repurchased $1.5 billion worth of shares during the quarter. eBay plans to return ~$5.5 billion to shareholders through dividends and repurchases in 2019. The company expects $7 billion worth of share buybacks over the next two years.

eBay’s revenues of $2.877 billion beat analysts’ expectations of $2.864 billion in the fourth quarter and were within the company’s guided range of $2.85 billion–$2.89 billion. The company’s revenues grew 6.3% YoY due to 4% growth in active buyers. The marketplace revenues and classifieds revenues increased 7% and 8%, respectively. StubHub revenues rose 2% on a reported basis.

However, eBay’s GMV (gross merchandise volumes) missed analysts’ estimates and grew 1% YoY to $24.6 billion. Consumer spending slowed down in December even though more buyers used the platform. The company expects the GMV to remain under pressure in the near term. The company has reduced some of its marketing spending. However, eBay thinks that the GMV will benefit in the long run due to its new ad sales and easier-to-use payment process to attract shoppers.

Guidance

For the first quarter, eBay expects revenues of $2.55 billion–$2.60 billion and an adjusted EPS of $0.62–$0.64. Analysts expect revenues and earnings of $2.581 billion and $0.63 per share, respectively.

For fiscal  2019, the company expects revenues of $10.7 billion–$10.9 billion—compared to analysts’ expectations of $10.883 billion. The company’s adjusted earnings are expected to be $2.62–$2.68 per share—compared to analysts’ expectations of $2.66 per share.

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