Tags: ebay | earnings | holiday sales forecast | data breach

EBay's Holiday Sales Forecast Misses Estimates After Data Breach

Wednesday, 15 Oct 2014 04:53 PM

EBay Inc., which will split into two companies next year, gave a sales forecast for the fourth quarter that missed estimates as the company recovers from the impact of a security breach that curbed customer growth.

Revenue for the current period will be $4.85 billion to $4.95 billion, the company said in a statement today. Profit before certain items will be 88 cents to 91 cents a share. Analysts on average projected sales of $5.16 billion and profit of 91 cents, according to data compiled by Bloomberg.

Even before the year-end shopping season, EBay Chief Executive Officer John Donahoe has had a busy year. In addition to the plan to spin off the PayPal payments business, EBay is trying to bounce back from a traffic decline. In May, EBay asked users to change their passwords after hackers gained access to login information, and Google Inc. changed its search results, curbing some of the traffic to EBay’s website from potential shoppers. The company now needs to show that it’s recovering from the attack, according to Victor Anthony, an analyst at Topeka Capital Markets Inc.

“If that issue continues to linger, it would be a significant negative,” said Anthony, who has a hold rating on EBay’s stock. “They produce a significant amount of revenue in the fourth quarter and they don’t want to enter it with any hiccups.”

Third-quarter sales rose 12 percent to $4.35 billion, the San Jose, California-based company said, falling short of the average analyst estimate of $4.36 billion. Excluding certain costs, profit in the latest period was 68 cents a share, compared with the average prediction for 67 cents.

PayPal Split

The shares of EBay fell as much as 5 percent in extended trading. The stock declined less than 1 percent to $50.24 at the close in New York, leaving it down 8.4 percent this year.

Net income fell 2.3 percent to $673 million in the third quarter, or 54 cents a share, from $689 million, or 53 cents, a year earlier.

Activist shareholder Carl Icahn pressured the company to split up in January, and EBay unveiled plans to spin off payments arm PayPal last month. Payments volume in EBay’s PayPal unit expanded by 29 percent in the latest quarter, compared with analysts’ average prediction for 27 percent growth. When EBay unveiled the split-up, Donahoe said an independent PayPal would have more flexibility to compete in the the digital-payments market, as consumers step up the use of smartphones and computers to pay for goods and services.

Revenue in the marketplaces business, EBay’s main auction and retail business, rose 6.4 percent to $2.16 billion in the latest quarter.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
EBay Inc., which will split into two companies next year, gave a sales forecast for the fourth quarter that missed estimates as the company recovers from the impact of a security breach that curbed customer growth.
ebay, earnings, holiday sales forecast, data breach
439
2014-53-15
Wednesday, 15 Oct 2014 04:53 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved