eBay Hits Q3 Targets, Gives Iffy Guidance

Shareholders send it down over five percent

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eBay continued a trend started by Google and Yahoo in the sense that it beat analysts’ expectations while announcing its third quarter earnings this afternoon.  Unfortunately for the company, it broke with their tradition by issuing some rather weak predictions about the fourth quarter.

Let’s start with the stuff that’s in stone.  eBay reported $2.2 billion in revenue, even though analysts though it would post $2.1 billion and it reported $120.3 million less the same quarter last year.  It came out ahead in terms of earnings per share, too, posting $0.38 instead of the $0.37 analysts forecast.

John DonahoeThese results gave president and CEO John Donahoe some room to say, "We’re delivering on our commitments, executing on our plans and operating smarter and faster."

Here’s the problem(s), though.  Eric Savitz wrote, "For Q4, the company sees revenue of $2.2 billion to $2.3 billion; the mid-point at $2.25 billion is a hair below the Street at $2.26 billion. That suggests the company actually see a sequentially flat Q4, which is not a very encouraging view of the holiday selling season.  The non-GAAP EPS guidance for the quarter is for 38-40 cents; that puts the mid-point at 39 cents a penny below the Street at 40 cents."

And shareholders are not at all happy about those numbers, selling enough of eBay’s stock to send it down 5.46 percent so far in after-hours trading.

eBay Hits Q3 Targets, Gives Iffy Guidance
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  • http://www.oldshopmanuals.com www.oldshopmanuals.com

    With Ebay’s new Powerseller requirements relaxed,there should be an immediate increase of the number of Powersellers flaunting their new status with an increase of items listings.This in turn should raise projected earnings in the Q4 considerably.

  • Guest

    If shareholders really understand the feedback policy for sellers, new DSR minimums and Paypal Rolling Reserve, it will not take much time for them to decide to move to a different company. eBay will soon be affected by those mistakes. Many things can be done to fix errors or to avoid new ones but extreme measures such as the 20% rolling reserve for up to 1 year, allowing buyers to open a dispute on eBay and with paypal as soon as a day after a purchase or those amazingly high DSRs (99.5% satisfaction rate expected) is just not the way to go. I’m really surprised that google, microsoft or yahoo have not seen an opportunity here. eBay is not moved by buyers, if there is not good products or good prices, buyers are just visitors. eBay and paypal understand this but they simply don’t care, is not difficult to forecast the effects of those actions, this is the part where shareholders should say, I’m out.

  • Ric

    Memo to the eBay Board Of Directors

    You have been listening to your overpaid ineffective CEO and the plethora of excuses he offers for why eBay continues to fail.

    You have heard all his assorted plans that were supposed to restore buyer trust and confidence in the marketplace.

    It is painfully obvious John Donahoe does not have the first clue as to how to reverse the tailspin his leadership and changes have brought eBay.

    Buyers have been voting with mouse clicks for a year now, yet you accept Donahoe’s excuse that the recession is the problem.

    Obviously the sales figures at Amazon tell quite the different story, as does the expanding success of smaller marketplaces, all at eBay’s expense. Amazon has been eating eBay’s lunch, and smaller sites like ecrater, bonanzle, etsy, etc.. have been getting fat on the leftovers.

    It is about time the screams of eBay sellers were heard, not dismissed as ”noise”.

    It’s time that buyers abandonment of eBay is constructively addressed, not disruptively ignored.

    It’s long past time the eBay Board of Directors stopped accepting the excuses for eBay’s failures and hands it’s failed CEO his golden parachute.

    Better yet, terminate John Donahoe for cause and withhold his golden parachute.

    Either way, it is long past the time to change ineffective leadership at eBay. The recent results reported by both eBay and Amazon illustrate the point.

    Before the eBay marketplace is completely and irreversibly destroyed, it is time to appoint a new CEO who is tasked with reversing the horrendous changes that have brought eBay to it’s knees.

    Give the new CEO a free hand to replace any and all current management, the power to reverse any and all unpopular changes and begin the process of salvaging what little is left of what was once the world’s most successful online marketplace.

    eBay does not need to be Costco. eBay does not need to be Amazon Lite. eBay does not need to be a liquidator.

    What eBay needs to be is the successful thriving platform it was only a few years ago before eBay started fixing things which were not broken.

    For Christmas, all we are asking for is competent leadership, not the Bain Pain which is choking the life out of eBay.

  • http://www.sellbits.com David

    When is ebay going to just disappear? I think it’s just a matter of time before people move on to the next best thing.

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