INSTANT VIEW: EBay warns on revs for year, shares drop
SAN FRANCISCO (Reuters) - EBay Inc (EBAY.O) warned on Wednesday that its full year revenues would fall below its previous forecast as the Internet giant restructures to reinvigorate growth in its main online auctions business.
Shares dropped more than 5 percent.
COMMENTARY:
STEPHEN JU, ANALYST, RBC CAPITAL MARKETS
"I think everybody is kind of gravitating toward the GMV (gross merchandise volume) growth rate, year over year. The GMV went negative in both domestic and international. That is basically the sum total of all the transactions that are going on the site. That's probably the biggest takeaway of the release.
"It's difficult to desegregate the effect of a consumer slowdown in spending versus what's company specific (issues). I don't even know if the company knows....but I think the GMV deceleration has been an established trend for the last few quarters almost the last year now."
ROBERT FRANCELLO, HEAD OF EQUITY TRADING, APEX CAPITAL IN
SAN FRANCISCO
"From what it looks like, eBay's revenue was in line with estimates and street whispers. There was a slight miss on guidance, on what looks like gross margins.
"The stock has been hit pretty hard, but when you're going into an earnings release when the market is essentially down 10 percent, nothing other than a significant beat will cause the stock to trade up. Stocks aren't trading on fundamentals right now. The focus is on financial solvency, unfortunately."
JEFF LINDSAY, SENIOR ANALYST, SANFORD BERNSTEIN
"They (investors) are looking at guidance, and it's really the guidance I think is disappointing. They just about made numbers here, but what's most disturbing is that their operating income has missed, and so they made it up on interest and on lower taxes -- which is fine, but people were hoping for evidence of strong operations. And then, I think investors were hoping they would not take guidance down significantly, but it seems that they've lowered guidance and that has resulted in a bunch of negative sentiment.
"They haven't taken guidance down really that much but the fact that they have taken it down at all -- people are reading in very negatively. I think what they are reading is that if the fourth quarter, which is normally eBay's strongest quarter and it's weak, they've probably seen the first month of the quarter and so it's probably a very bad signal for 2009. That's how it seems to us."
RYAN JACOB, PORTFOLIO MANAGER, JACOB INTERNET FUND, WHICH
HOLDS A SMALL POSITION IN EBAY
"My first impression is that I think the numbers in general were pretty poor. Their core marketplace continues to struggle and the economy is not helping the situation.
"They've gone through a major restructuring of their core business and we just haven't seen the results come through with that in terms of trying to focus more on buyers than sellers.
"The economic environment is not helping. EBay's problem is they are being affected by a weaker economy. But probably even more importantly, from a competitive standpoint more people are going direct to make purchases on company Websites and from sites like the Amazon marketplace. They've really done a pretty good job in making the Amazon marketplace very attractive for sellers."
YOUSSEF SQUALI, ANALYST, JEFFERIES & CO, NEW YORK
"One of the biggest surprises here was the GMV (gross merchandise volume) growth, which turned negative for the first time ever ... That's not good and I would suspect that combined with the lower guidance is sending the stock price down after hours."
"GMV growth domestic is probably, you know, down substantially and that's probably what's driving the overall decreases ... It's probably a reflection of the economy but also a more competitive landscape."
