EBay posts strong results; cautious on holiday outlook
By Alistair Barr
SAN FRANCISCO (Reuters) - EBay Inc reported strong quarterly results on Wednesday, but the e-commerce company gave a cautious forecast for the crucial holiday season amid a brewing price war between big retailers and rival Amazon.com Inc.
EBay said third-quarter revenue rose 15 percent to $3.4 billion, while profit climbed 14 percent to $718 million, or 55 cents a share, compared with 48 cents last year. The revenue matched Wall Street estimates, while profit beat by a penny.
EBay forecast fourth-quarter revenue of $3.85 billion to $4 billion and profit of 66 cents to 69 cents per share. Wall Street was looking for fourth-quarter earnings of 68 cents a share on revenue of $3.94 billion, according to Thomson Reuters I/B/E/S.
EBay shares fluctuated between small gains and losses in after-hours trading following the results.
"Not as overpowering a beat as the last couple of quarters, but they do appear on track," said Gil Luria, an analyst at Wedbush Securities.
Some analysts expected eBay to lift its fourth-quarter forecast a lot, but that did not happen.
"Given that there had been a lot of momentum in eBay and PayPal's businesses, expectations may have gotten ahead of themselves," said RJ Hottovy, an equity analyst at Morningstar.
EBay may be giving a cautious outlook for the holiday season because big retailers including Target Corp and Best Buy Co Inc are planning to match Amazon's online prices, Hottovy noted. This price tussle may put more shoppers and revenue up for grabs during the fourth quarter, he added. Continued...