EBay Inc on Wednesday gave a disappointing holiday forecast, saying the U.S. economic environment, including consumer confidence, had deteriorated in part because of the shutdown of the U.S. government.<\/p>\n
Shares of the e-commerce company fell 5.7 percent in after-hours trading.<\/p>\n
Chief Financial Officer Bob Swan told investors on a conference call that industry growth rates for e-commerce had shrunk to about 13 percent in the third quarter, from about 16 percent in the previous quarter.<\/p>\n
“We really haven’t seen any more positive signs in October,” he added.<\/p>\n
Earlier in the day, U.S. Senate leaders announced a deal to reopen the government and avert a U.S. debt default.<\/p>\n
But the deal would only fund the government until January 15, so Americans face the possibility of another government shutdown.<\/p>\n
“We won’t know until weeks from now, and I hope this deal sticks,” eBay Chief Executive John Donahoe said when asked if the end of the conflict would lift mood of shoppers.<\/p>\n
Data firm ShopperTrak has forecast the slowest holiday sales growth since 2009, and last week, September retail sales showed U.S. shoppers were cautious, following a disappointing second quarter for many retailers.<\/p>\n
U.S. consumer confidence slid last month to its lowest since May, according to a report released in late September by the Conference Board, an industry group.<\/p>\n
EBay expects revenue of between $4.5 billion and $4.6 billion for the fourth quarter, ending December 31, compared with the $4.64 billion estimated by analysts, according to Thomson Reuters I\/B\/E\/S.<\/p>\n
Net income for its third quarter was $689 million, or 53 cents a share, up from $597 million, or 45 cents a share, a year earlier. Excluding the benefit of its sales of stakes in e-commerce companies RueLaLa and ShopRunner, eBay earned 64 cents, one cent better then expected. Revenue rose 14.3 percent to $3.89 billion.<\/p>\n
For the holiday quarter, eBay expects a profit of 79 cents to 81 cents a share, while Wall Street analysts estimate 83 cents.<\/p>\n
The company kept its full-year forecasts, but CFO Swan said revenue and profits are likely to come in at the low end of eBay’s forecast.<\/p>\n
PayPal, eBay’s online payments division, reported that total payments volume rose 24.7 percent to $43.8 billion.<\/p>\n
EBay lagged behind rival Amazon.com Inc for several years, but Donahoe has led a turnaround in recent years that focuses on mobile shoppers, international expansion and tie-ups with local physical stores. Amazon, whose shares fell 1.2 percent in after-hours trade on Wednesday, reports results next week.<\/p>\n
EBay said that gross merchandise volume, or the dollar value of merchandise sold on its marketplaces, rose 12.7 percent to $18.4 billion in the United States, excluding auto sales.<\/p>\n
EBay said the environment in Europe and Asia was mostly stable. In July, the company said Europe was weighing on its results.<\/p>\n
The e-commerce company’s third-quarter profit was boosted by its PayPal online payments business as consumers made greater use of its PayPal service.<\/p>\n
This summer, eBay expanded its eBay Now same-day delivery service into new markets and last month bought payments gateway Braintree for about $800 million to strengthen PayPal’s presence on mobile devices.<\/p>\n
To compete with Amazon’s Prime service, PayPal is offering for a limited time free two-day shipping for items paid for with that service.<\/p>\n
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