Ebay shares drop as it slashes forecasts for holiday quarter
Ebay has slashed its outlook for the full year amid its third quarter results, sparking concerns among investors it could struggle in the upcoming holiday season.
Shares in the ecommerce giant fell 3.1 per cent in after hours trade after Ebay revealed that its third quarter profits failed to meet expectations.
In the three months to September 30, Ebay posted net revenues of $2,65 billion coming in line with its own forecasts and flat from the same period last year.
Although active buyers on the platform increased four per cent, its gross merchandise value (GMV) for the quarter dropped 4.4 per cent year-on-year to $21.7 billion.
Meanwhile its earnings per diluted share dropped from 73 cents to 37 cents compared to last year, coming below its own forecasts of between 40 and 44 cents and analyst forecasts of 45 cents per share.
Forecasts for the coming holiday period were shaved from $2.85 billion, to between £2.77 billion and $2.82 billion.
For the full year it forecast net revenues of between $10.75 billion and $10.8 billion, down from previous top end forecasts of $10.83 billion marking currency neutral growth of two to three per cent this year.
This comes as Ebay’s former chief executive Devin Wenig abruptly stepped down in September over disagreements with the company’s new board and plans to sell off StubHub and Gumtree businesses.
The company said it would continue to review the “value” of these operations and would provide an update on whether it plans to offload them before its next earnings report.