NEW YORK: EBay grew its earnings and revenue in the first quarter thanks to growth in its PayPal business and its e-commerce sites. But revenue fell shy of Wall Street's expectations and the company's outlook for the current quarter is weaker than expected, causing investors to send the company's stock lower in after-hours trading.
The company recently issued an upbeat long-term forecast, but some analysts are worried about short-term challenges EBay faces. Benchmark analyst Daniel Kurnos believes EBay is confronted with tight retail inventories and potential pressure from credit card companies on PayPal's profit margins if they start charging fees for the payments service.
EBay Inc. said Wednesday that it earned $677 million, or 51 cents per share, in the January-March period. That's up 19 per cent from $570 million, or 44 cents per share, in the same period a year earlier.
Adjusted earnings were 63 cents per share, up from last year's 55 cents and a penny above analysts' expectations of 62 cents.
Revenue grew 14 per cent to $3.75 billion, slightly below Wall Street's expectations. Analysts polled by FactSet were anticipating $3.77 billion.
For the current quarter, eBay expects earnings of 46 cents to 48 cents per share and adjusted earnings of 61 cents to 63 cents per share. Analysts are predicting higher earnings of 66 cents per share.
The company's revenue forecast of $3.8 billion to $3.9 billion is also slightly below the $3.95 billion analysts are expecting.
The San Jose, California-based company's stock fell $1.30, or 2.3 per cent, to $54.80 in after-hours trading. The stock had closed down 91 cents at $56.10, up 10 per cent year-to-date.