EBay Earnings Outlook Misses Estimates, Sending Shares Lower

(Bloomberg) -- EBay Inc. reported an earnings outlook for the current quarter that missed analysts’ estimates, suggesting the company’s expenses are undermining the pandemic-fueled surge in online shopping. The shares tumbled.

Sales will be $2.98 billion to $3.03 billion in the second quarter, the San Jose, California-based company said Wednesday in a statement. Earnings, excluding some items, will be 91 cents to 96 cents a share. Analysts estimated profit of 98 cents a share on sales of $2.95 billion.

Pandemic-wary consumers have turned to online marketplaces like Amazon.com Inc. and EBay, which said it ended the quarter with 187 million active buyers, an increase of 7%. The big question for investors is whether the change in shopping habits will endure post-outbreak and if shoppers will start shifting some of their disposable income to traveling and eating out once most people are vaccinated. Amazon reports results on Thursday.

Activist investors who want EBay to focus on its main business forced the company to slim down. Last year, event-tickets marketplace StubHub went to Viagogo for $4.05 billion. The sale of most of the classifieds business to Norway’s Adevinta ASA hit a snag with U.K. regulators. EBay is also exploring the sale of its online marketplace in Korea where the company generates more than 10% of revenue. EBay did not provide any updates on either of those efforts.

Chief Executive Officer Jamie Iannone, who took the reins last year, is looking to generate more revenue from advertising and payments, businesses that can offset slow growth of EBay’s core online marketplace.

Gross merchandise volume, the value of all goods sold on the site, rose 29% in the first quarter to $27.5 billion. Analysts predicted $26.2 billion.

Shares fell as much as 7% in extended trading after closing at $62.32. The stock has increased almost 60% in the past 12 months.

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