eBay largely meets earnings expectations but predicts slowdown ahead

12 Aug 2021

Image: © burdun /Stock.adobe.com

The company slightly beat on EPS and missed on revenue as the Covid-19 e-commerce bump begins to fade.

E-commerce marketplace eBay posted second-quarter earnings that were largely in line with expectations, but the company is predicting a slowdown in the next quarter.

For the three months ending 30 June, Wall Street had been expecting quarterly revenue of $3bn, but the company reported just $2.7bn, a 14pc increase year on year. It also reported diluted earnings per share (EPS) of $0.99, steady from the same period last year and edging out predictions of $0.95.

For the current quarter, the company is predicting revenues of between $2.42bn and $2.47bn, which would represent 6pc to 8pc growth year on year, but a slump compared to Q2. Similarly, it expects diluted EPS to slide to between $0.86 and $0.90. The Covid-19 e-commerce bump appears to fading away for the company.

eBay CEO Jamie Iannone said he was “pleased to announce another strong quarter”, despite the outlook. “We remain relentlessly focused on accelerating our product innovation by harnessing the power of next-gen technology and creating a more seamless experience for sellers,” Iannone added.

“We are delivering innovative category experiences for buyers and quickly evolving in our pursuit to be the best global marketplace to sell and buy.”

During the quarter, eBay announced that it is selling 80pc of its South Korean business to domestic retailer E-Mart for $3bn. Iannone said the deal, which is expected to close later this year or in early 2021, would help with “simplifying our portfolio and growing our core”.

eBay also began allowing customers to sell non-fungible tokens on its platform during this period, which it said at the time would “offer greater access to a broader audience of collectors and creators”. It is part of the company’s plans to reimagine its platform using technology.

eBay’s slight miss on Q2 revenue and somewhat glum predictions for Q3 closely mirror the situation of e-commerce giant Amazon. It also expects the Covid-19 e-commerce boost to fade this quarter and revenues to slip accordingly.

Jack Kennedy is a freelance journalist based in Dublin