eBay sees declines in profit and operating margin in Q3

Big deal, though, because I'm sure investors weren't too happy with the operating margin. The adjusted metric went from 31.8% to 28.4% in Q3. Several factors were cited in the press release as to why this happened, and let me say, it's never comforting to hear that a business you're invested in is shifting to "faster growing, lower margin businesses." Yes, I do get what management wants to do. It's sacrificing a little here and a little there for future earnings expansion, but again, high-margin ventures are more popular.

We should not overlook the statement of cash flows, which wasn't bad at all. Money derived from operating activities increased over the nine-month period. Free cash flow held up well, too. You therefore have to give management some credit for this part of the release. Without a doubt, generation of the green stuff is important.

I don't think the after-hours sell-off or the guidance is going to sink eBay's short-term prospects. We'll have to see where the stock closes at today, but any pullbacks could possibly be bought for a trade, considering that shares have made it to the 52-week-high club.

However, eBay is not, to me at least, a candidate for a long-term portfolio. There are issues with Skype, as this article from Daily Finance mentions, as well as simple concern for the holiday season. Retail investors who don't trade a lot would probably be better off considering avoiding eBay for now.

Disclosure: I don't own any company mentioned; positions can change without notice.