By Alistair Barr
SAN FRANCISCO, March 28 EBay Inc
foresees annual earnings growth of 15 percent to 19 percent over
the next three years, and is targeting an increase in revenue of
as much as 68 percent for the period. The aggressive goals drove
its shares up more than 4 percent.
Executives told analysts at eBay's annual investor day on
Thursday that they expect revenue of $21.5 billion to $23.5
billion in 2015, versus $14 billion in 2012, as the company
expands globally, focusing more on local commerce and using
mobile technology to lure shoppers.
By then, its marketplaces business - which hosts external
merchants - will handle $110 billion in sales volume in 2015, up
from $75 billion in 2012, the executives said.
Wall Street embraced Chief Executive John Donahoe's new
targets, sending eBay shares up 4.1 percent to $54.22 by the
close of business on Thursday. The shares added another 0.5
percent to trade at $54.50 after hours.
"Management is clearly feeling confident about the next
three years, and we would agree that they have tailwinds in both
the Marketplace and payment businesses," said Colin Sebastian,
an analyst at R.W. Baird.
"If they actually crack the local market opportunities, the
guidance could prove conservative," he added.
After bleeding market share to Amazon.com Inc for
years, eBay, under Chief Executive John Donahoe, began a
turnaround effort in 2009 that put the Internet commerce company
back on track by borrowing from its larger rival's playbook.
He took what was then a muddled auctions website and made it
easier for shoppers to buy new items at fixed prices and get
more free shipping and returns - essentially mimicking the
Amazon experience. He also embraced mobile technology, creating
shopping apps for smartphones and tablets that brought in new
But eBay's online marketplace is still growing less than
Amazon's and some analysts are concerned its growth may not keep
up with the overall expansion of the online retail sector.
The forecast for Marketplaces, offered by its chief, Devin
Wenig, was higher than Wall Street expected and represents a 47
percent jump in gross merchandise volume, or GMV, from 2012's
GMV is a closely watched measure of eBay's performance. Doug
Anmuth, an analyst at JP Morgan, had estimated 2015 GMV of $101
PayPal President David Marcus said PayPal can double the
size of its business in the next three years. That means total
payment volume, or TPV, processed by PayPal will double from
$145 billion at the end of 2012 to roughly $290 billion at the
end of 2015. Anmuth was calling for 2015 total payment volume of
Wenig told analysts and investors that the company's core
business will deliver at least market rates of growth.
CEO Donahoe said that the company would handle $300 billion
of commerce in 2015 in various ways, up 71 percent from $175
billion in 2012.
That forecast includes sales on eBay's online marketplace,
payments processed by PayPal and other transactions touched by
the company's various businesses, such as GSI Commerce.
"That's one of the ways we will measure our success,"
Donahoe said during eBay's investor day at its headquarters in
Chief Financial Officer Bob Swan said eBay's cut of that
activity will decline slightly from 8 percent in 2012 to about
7.5 percent in 2015.
That decline will be driven by PayPal's growth and its
expansion into physical stores, which is expected to be less
profitable than its existing online payments business.
EBay is focusing on three main areas of growth - global
expansion, local commerce and mobile applications designed to
encourage consumers to shop more on its marketplace and use
PayPal more to pay for those purchases.
EBay is aiming to increase sales in emerging markets and
BRIC countries - Brazil, Russia, India and China - by four times
current levels in three years, said Wendy Jones, an executive
overseeing the global push.
By the end of 2015, as much as 25 percent of eBay active
users and more than 12 percent of global sales will come from
BRIC countries and emerging markets, she added.