eBay’s released their first quarter earnings report on Wednesday.
The good news is there were no bombshells or hidden surprises. And the company appears on a steady rebound.
Last year, eBay’s stock rose almost 34 percent. This shows that investors are generally happy with eBay’s changes and performance.
Most people who follow eBay will remember there was a lot of apprehension with the split from PayPal. Some believed that eBay would struggle to stand on its own.
EBAY EARNINGS – THE NUMBERS
Revenue for the quarter was up by $2.2 billion, a 4 percent increase over the same quarter last year. Net income for the period was $1 billion or 94 cents a share. This excludes special items.
Net income from continuing operations was $538 million or about 49 cents a share. Wall Street was forecasting 48 cents a share, so eBay slightly exceeded projections.
Gross Merchandise Volume (GMV) for the quarter was $20.9 billion, which was a little below expectations of $21.06 billion analysts had expected. GMV represents the measure of total sales transactions on the platform.
The sports and entertainment ticket platform StubHub, which eBay owns, had a 18% increase in revenue.
eBay also stated it added 2 million active buyers in the first quarter, bringing its total of active buyers globally to 169 million.
The company also announced they purchased back $350 in common stock. And they updated their guidance for the year, expecting revenues between $9.3 and $9.5 billion.
Shares of eBay dropped a little in after hours trading, most likely due to the minor decline in GMV over the same quarter last year.
But overall performance was in line with expectations and eBay appears on a path that makes investors happy.
KEEPING SELLERS HAPPY
Now comes the trick if eBay can keep sellers happy. The Spring Seller Update did seem to make changes to the platform that favor the bottom line for eBay.
Many eBay sellers reacted negatively to these changes. Will eBay continue to bring more buyers to sellers to make up for the increase in seller costs?
eBay did state they are spending a lot of money on advertising and this did impact their first quarter profits.
The increase in fees should make up for the increase in marketing expenditures. It will be interesting to watch if eBay will continue their aggressive marketing campaign to justify those fee increases.