By Phil Wahba
Oct 16 EBay Inc on Wednesday gave a
disappointing holiday forecast, saying the U.S. economic
environment, including consumer confidence, had deteriorated in
part because of the shutdown of the U.S. government.
Shares of the e-commerce company fell 5.7 percent in
Chief Financial Officer Bob Swan told investors on a
conference call that industry growth rates for e-commerce had
shrunk to about 13 percent in the third quarter, from about 16
percent in the previous quarter.
"We really haven't seen any more positive signs in October,"
Earlier in the day, U.S. Senate leaders announced a deal to
reopen the government and avert a U.S. debt default.
But the deal would only fund the government until Jan. 15,
so Americans face the possibility of another government
"We won't know until weeks from now, and I hope this deal
sticks," eBay Chief Executive John Donahoe said when asked if
the end of the conflict would lift mood of shoppers.
Data firm ShopperTrak has forecast the slowest holiday sales
growth since 2009, and last week, September retail sales showed
U.S. shoppers were cautious, following a disappointing second
quarter for many retailers.
U.S. consumer confidence slid last month to its lowest
since May, according to a report released in late September by
the Conference Board, an industry group.
EBay expects revenue of between $4.5 billion and $4.6
billion for the fourth quarter, ending Dec. 31, compared with
the $4.64 billion estimated by analysts, according to Thomson
Net income for its third quarter was $689 million, or 53
cents a share, up from $597 million, or 45 cents a share, a year
earlier. Excluding the benefit of its sales of stakes in
e-commerce companies RueLaLa and ShopRunner, eBay earned 64
cents, one cent better then expected. Revenue rose 14.3 percent
to $3.89 billion.
For the holiday quarter, eBay expects a profit of 79 cents
to 81 cents a share, while Wall Street analysts estimate 83
The company kept its full-year forecasts, but CFO Swan said
revenue and profits are likely to come in at the low end of
PayPal, eBay's online payments division, reported that total
payments volume rose 24.7 percent to $43.8 billion.
EBay lagged behind rival Amazon.com Inc for several
years, but Donahoe has led a turnaround in recent years that
focuses on mobile shoppers, international expansion and tie-ups
with local physical stores. Amazon, whose shares fell 1.2
percent in after-hours trade on Wednesday, reports results next
EBay said that gross merchandise volume, or the dollar value
of merchandise sold on its marketplaces, rose 12.7 percent to
$18.4 billion in the United States, excluding auto sales.
EBay said the environment in Europe and Asia was mostly
stable. In July, the company said Europe was weighing on its
The e-commerce company's third-quarter profit was boosted by
its PayPal online payments business as consumers made greater
use of its PayPal service.
This summer, eBay expanded its eBay Now same-day delivery
service into new markets and last month bought payments gateway
Braintree for about $800 million to strengthen PayPal's presence
on mobile devices.
To compete with Amazon's Prime service, PayPal is offering
for a limited time free two-day shipping for items paid for with