EBay stock leaps after earnings beat and rosy outlook

Shares of eBay jumped higher Thursday, the day after the company reported third-quarter profits that topped Wall Street’s expectations, offered a rosy outlook for the upcoming holiday season, and indicated that life after PayPal might be robust.

The San Jose-based online marketplace’s stock is up 11 percent.

Excluding one-time items, eBay earned 43 cents a share, compared with analysts’ predictions of 40 cents. Revenue totaled $2.15 billion, compared with projections of $2.09 billion.

“We traded off short-term growth, and focused more on long-term investments,” eBay Chief Executive Officer Devin Wenig said in a conference call with analysts. “We are doing what we said we would do, and we have confidence in our plans going forward.”

Those plans include a business without the PayPal operations, which were split off from eBay in July. EBay has shed other assets, including its stake in CraigsList and its enterprise unit. The company also closed its one-hour delivery service.

Investors also were pleased by a brighter outlook from eBay.

The e-commerce company raised its profit outlook for all of 2015 to a range of $1.80 to $1.82 a share, compared with the prior guidance of $1.72 to $1.77. Analysts were expecting $1.78 a share in full-year profits.

EBay left unchanged its projection that revenue would rise about 3 percent to 5 percent this year.

Challenges have emerged for eBay from foes such as Amazon.com and Wal-Mart.

Despite the fierce competition, eBay added 2 million active users, increasing its total active user base to 159 million. Those totals are 5 percent above the year-ago figures.

“We remain focused on our strategy and executing our key initiatives to re-position eBay for success, while delivering on our financial commitments, buying back nearly $600 million of stock, and continuing to demonstrate our disciplined approach to capital allocation,” Chief Financial Officer Scott Schenkel told the analysts during the conference call.

 

Photo: eBay headquarters in San Jose. (Bay Area News Group)

 

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