Tags: EBay Shares Fall After in-Line Forecast

EBay Shares Fall After in-Line Forecast

Wednesday, 22 Sep 2010 02:49 PM

Shares of online retail site operator eBay Inc fell 3.5 percent on Wednesday after it eliminated the likelihood that third-quarter profit would beat analyst expectations.

The company also said that the head of its marketplaces business, the company's largest unit, has left for personal family reasons.

While analysts downplayed the long-term impact of the departure eBay Marketplaces President Lorrie Norrington while the unit was in the middle of a three-year turnaround plan, they did say the timing of the announcement could be an issue.

"It always introduces a level of uncertainty when you have a level of senior management that departs, especially during the holiday season," BGC Financial analyst Colin Gillis said.

EBay said that CEO John Donahoe would oversee the unit's management team while the company searches outside for a successor to Norrington.

EBay said on Tuesday that third-quarter earnings per share would be near the top end of its own forecast range. That range was 35 to 37 cents a share and analysts, on average, forecast 37 cents, according to Thomson Reuters I/B/E/S.

Deutsche Bank analyst Jeetil Patel said that the strengthening of the euro versus the dollar from July to September added to eBay's earnings since it made the forecast in July.

That means the forecast implies no "upside" for earnings "in quite some time," Patel said in a note to clients.

"We think this news leaves little margin for error on business trends for September and (the fourth quarter)," he said.

EBay shares were down 84 cents at $23.90 on Wednesday morning on the Nasdaq.

© 2017 Thomson/Reuters. All rights reserved.

 
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Shares of online retail site operator eBay Inc fell 3.5 percent on Wednesday after it eliminated the likelihood that third-quarter profit would beat analyst expectations. The company also said that the head of its marketplaces business, the company's largest unit, has left...
EBay Shares Fall After in-Line Forecast
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2010-49-22
Wednesday, 22 Sep 2010 02:49 PM
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