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Shares of eBay Inc. (NASDAQ: EBAY) are up about 2% today, ahead of the announcement of its quarterly financial results after the close. What to expect when the online auction site reports? Well, if you're interested in numbers, eBay indicated that second-quarter earnings will be between 30 and 32 cents per share, or between 39 and 41 cents per share on an adjusted basis. The company also predicted revenue of $2.1 to $2.15 billion. Analysts polled by Thomson Financial expect eBay to be pretty much in-line with estimates, or just slightly better, and post adjusted earnings of 41 cents per share on revenue of $2.17 billion.
According to Jefferies & Co., eBay experiences "strong Marketplaces listings growth and ongoing strength in payments and non-gross merchandise value, or GMV, businesses." On Tuesday, RBC Capital Markets maintained its Sector Perform rating on eBay, but reduced the target price from $40 to $35 due to "continued transition of the company's platform and low visibility into the core marketplaces platform," and due to some misgivings about month-to-month worsening trends. However, Morgan Stanley, Citigroup and Banc of America actually raised estimates recently.
Then there's the rest -- the users, the buyers and sellers. What's going on according to them? It seems that eBay has changed. Many lament the company they once knew, saying it is no longer. And I'm not just talking about the outrage from sellers we've become accustomed to over the past two years or so. Many (now past) users say it is no longer the old eBay with a core marketplace business, it is a large company that may have forgotten how it came to be so large and what its core strengths are. No longer mainly an auction site, eBay has transformed itself into a facilitator for e-tailers where prices are either set or too efficient to attract users looking for the fun of bidding or for a bargain.
eBay may do very well as the new company it has become, and indeed the listing growth rate is remarkable, causing some analysts to talk about a 10% to 15% sustainable growth rate for the company. But remember Starbucks' (NASDAQ: SBUX) decline following its rapid growth and ensuing loss of focus. Could that happen to eBay?
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Reader Comments (Page 1 of 1)
7-16-2008 @ 4:03PM
Preypal Problems said...
They fail to say that the listing growth is due to the millions of listings from Buy.com over the past few months. Listings that were free, meaning they bring in no revenue and with a sell through rate around 3%, it looks like their auctions are bringing in much revenue either.
Many of the PAYING sellers, have left and Buy.com is keeping the count afloat. If you removed their FREE listings, you have a true count and would see that the boycott is working.
Not to mention the glitches that charged millions of sellers for their Skype service and the low handed way they charge sellers for subscriptions that were free with the store, but don't remove them, when the store has been shut down.
VERY SHADY, do the revenue from these glitches, get calculated into their earnings?