Net income fell from $460 million to $357 million or $0.28 a share missing analyst’s forecasts
The earning consensus on Wall Street was for eBay to be down 20% and earnings to come in at $0.33 share. eBay CEO, John Donahoe blamed the stronger dollar and the challenging economy. PayPal and Skype did well.
Here is what eBay said about the Marketplaces division that includes US and overseas eBay sites and the classified advertising site Kijiji:
“The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, recorded $1.22 billion in revenue, equating to an 18% year-over-year decline. The revenue drop was attributable to the impact of the strengthening dollar and the decline of the core business in difficult macroeconomic conditions. Approximately 54% of Marketplaces revenue came from markets outside of the U.S. GMV (excluding vehicles) was $10.80 billion for the quarter, a decrease of 16%, compared to the first quarter of 2008. Online classifieds revenue increased 23% year-over-year. eBay Marketplaces continues to focus on stabilizing its core business by improving trust, value and selection for customers while looking for ways to drive growth through geographic, format and category expansion.”
The business forecast is not too rosy either as eBay sees further declines in the coming quarter:
“Second quarter 2009 — eBay expects net revenues in the range of $1.850 to $2.050 billion with GAAP earnings per diluted share in the range of $0.23 to $0.26 and non-GAAP earnings per diluted share in the range of $0.34 to $0.36”
Even with what I consider to be bad news, eBay stock is up almost 5% in after hours trading. i guess I know why I am not a Wall Street analyst.
I will be out of the office for the next few days with limited access to my computer, but stay tuned for a wrap up and analysis on the challenges eBay is facing.
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