{"id":259377,"date":"2018-07-19T07:24:28","date_gmt":"2018-07-19T05:24:28","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=259377"},"modified":"2018-07-19T07:24:28","modified_gmt":"2018-07-19T05:24:28","slug":"ebays-growth-forecast-a-worry-for-investors","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/internet\/259377\/ebays-growth-forecast-a-worry-for-investors\/","title":{"rendered":"EBay\u2019s growth forecast a worry for investors"},"content":{"rendered":"
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EBay Inc gave a lackluster sales forecast for the third quarter and lowered its revenue guidance for the year, worrying investors that the online marketplace is losing momentum as the critical holiday season approaches.<\/p>\n

Shares dropped 5% in extended trading.<\/p>\n

The company said sales will be $2.64 billion to $2.69 billion in the third quarter, while analysts were projecting $2.73 billion.<\/p>\n

Earnings per share, excluding some costs, are forecast to be 54 cents to 56 cents, compared with analysts\u2019 average estimate of 56 cents.<\/p>\n

The company also pared its full-year revenue projection, reviving concerns that EBay is struggling to find its place in the shadow of online retail behemoth Amazon.com Inc.<\/p>\n

\u201cWhen you\u2019re in e-commerce and growing at half the rate of the overall industry, that\u2019s not going to cut it,\u201d said Josh Olson, an analyst at Edward Jones & Co.<\/p>\n

\u201cInvestors don\u2019t come to e-commerce for value. They come to e-commerce for growth.\u201d<\/p>\n

Investors are monitoring EBay\u2019s growth to determine if it can remain relevant. Brick-and-mortar retailers like Walmart Inc are improving their own digital-shopping options, adding more competition and pressure on EBay.<\/p>\n

\u201cThe buyers on EBay are engaged, but they\u2019re not bringing enough new customers to the platform,\u201d said RJ Hottovy, an analyst at Morningstar Inc.<\/p>\n

\u201cThey\u2019re doing some interesting things, but it\u2019s tough to compete with Amazon.\u201d<\/p>\n

In the second quarter, EBay\u2019s profit was 53 cents a share on revenue of $2.64 billion, according to a statement Wednesday. Total gross merchandise volume, a key metric, rose 10 percent to $23.6 billion. Active customer accounts grew 4 percent to 175 million.<\/p>\n

The shares fluctuated wildly after the earnings were announced, tumbling as much as 6.4% in extended trading before rising almost 2.5 percent – and then slipping again 5%.<\/p>\n

The stock closed at $37.95 in New York. EBay shares have see-sawed this year, peaking at $46.19 in February after the company announced it would lower costs by using Adyen BV for payments processing rather than longtime partner PayPal Holdings Inc.<\/p>\n

It gave the gains back in April after issuing a disappointing second-quarter revenue forecast.<\/p>\n

There are signs EBay is struggling. The company in June announced a reorganization that resulted in staff cuts of almost 300 employees. Software engineers and research scientists were among those let go in California, where EBay has its headquarters in San Jose. The company had 14,100 employees globally at the end of 2017.<\/p>\n

It could take investors time to adjust to a new strategy that sacrifices sales growth for profitability, Hottovy said.<\/p>\n

EBay has boosted advertising and changed the marketplace shopping experience in an effort to lure new customers to the site.<\/p>\n

It tries to differentiate itself from Amazon, which charges yearly or monthly dues for shipping discounts, by emphasizing that EBay has no membership fees to access deals that often include free shipping. It ran a day of discounts on July 16 to compete with Amazon\u2019s Prime Day promotion.<\/p>\n

Amazon continues to gain market share, and now boasts 100 million global Prime subscribers. The world\u2019s biggest online retailer will capture 49.1% of online spending in the U.S. this year, up from 43.5 percent in 2017, according to EMarketer Inc.<\/p>\n

EBay is a distant second in the US with 6.6% of all spending.<\/p>\n

\"\"<\/a><\/p>\n

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Read: Online vs physical retail shopping \u2013 which is cheaper in South Africa<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

EBay Inc gave a lackluster sales forecast for the third quarter and lowered its revenue guidance for the year, worrying investors that the online marketplace is losing momentum as the critical holiday season approaches.<\/p>\n","protected":false},"author":59,"featured_media":34052,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9882],"tags":[803,26],"class_list":["post-259377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-ebay","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/259377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=259377"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/259377\/revisions"}],"predecessor-version":[{"id":259383,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/259377\/revisions\/259383"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/34052"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=259377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=259377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=259377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}