eBay (EBAY) Breaks Out Following Earnings
Contrary to many assumptions, online auction site eBay (EBAY) looks like it's doing just fine without online payment partner PayPal (PYPL) being under the same umbrella. The first eBay earnings report that didn't include PayPal's results were released after the close on Wednesday, and were notably better than expected.
All told, eBay earned 43 cents per share in its third quarter of the year, on $2.1 billion in revenue. Both were lower than the year-ago figures, off 6% and 2%, respectively. But, both were also stronger than analyst expectations - the pros were only calling for a bottom line of 40 cents per share of EBAY and a top line of just a tad less than $2.1 billion, on average.
The sales and earnings figures along with a handful of other metrics like the number of active added during the quarter suggest that new CEO Devin Wenig is on the right path to rebuilding the once great brand that has recently hit a headwind of saturation, competition, and search engine woes, the biggest hurdle of which may be the last... the difficulty eBay now has in being found using the Google search engine. The search site reconfigured how it rates and therefore displays eBay's item-listing pages, pushing them further down the results and often out of site for potential customers.
The online-auction site also finally seems to be working past the impact of a security breach last year that compromised the personal data of about 150 million eBay users.
Better yet, eBay has upped its guidance for the all-important current quarter, which will include holiday shopping sales. The company now anticipates earnings of between 47 cents and 49 cents per share, versus analyst consensus estimates of 49 cents.
The news was encouraging enough to snap EBAY shares out of the downtrend they've been in since August, shortly after PayPal and eBay split. Better yet, the post-earnings surge has pulled the stock out of converging wedge pattern and simultaneously pulled EBAY above its 50-day moving average line (although it did leave behind a gap in the process).
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