eBay posted solid second-quarter figures last night as earnngs per share (EPS) jumped by 28% to 68 cents, and topped the 62 cents forecast. Revenue edged up by 2% to $2.69 billion. Investors will be keeping a close eye on the eBay share price.
Adding to the positive figures was the news the company is considering selling-off its Stubhub and Classifieds businesses. Activist investors like Starboard Value and Elliott management hold stakes in eBay, and no doubt the pressure they applied to the firm was a factor is the decision to look to sell the businesses.
eBay expands into new markets
ebay has acquired a 5.5% stake in India’s Paytm Mall, as the group shrewdly wants to gain access to the country’s fast growing online retail market. The move is a part of the group’s strategic review, whereby it focuses on operations that are similar to its core business, and it spins off non-core companies. Paytm handles roughly $100 billion worth of annual sales, and the group is aiming to double the number of its merchants this year, which should lead to a jump in activity. The online marketplace is changing as Amazon branches out into other businesses, and traditional retailer’s ramp up their online presence, so eBay needs to stay match fit.
The US consumer climate continues to be robust despite the intermittent chatter of recession fears. US retail sales grew by 0.4% on a monthly basis in June and May The jobless rate is near a 50-year low, and average earnings are 3.1%, which is almost double the CPI rate. There is speculation the Fed will cut rates later this month, and should that be the case, it should facilitate consumer spending.
Positive Q3 outlook could bolster eBay share price
eBay issued a largely positive outlook too as third-quarter EPS is expected to be between 62 cents and 65 cents, and equity analysts are predicting 63 cents. The revenue forecast is $2.66 billion, and the consensus estimate is $2.68 billion, so depending on the performance of the eBay share price, shares are likely to be in demand.