EBay sets aggressive 2015 targets, shares climb

Thu Mar 28, 2013 5:55pm EDT
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By Alistair Barr

SAN FRANCISCO (Reuters) - EBay Inc foresees annual earnings growth of 15 percent to 19 percent over the next three years, and is targeting an increase in revenue of as much as 68 percent for the period. The aggressive goals drove its shares up more than 4 percent.

Executives told analysts at eBay's annual investor day on Thursday that they expect revenue of $21.5 billion to $23.5 billion in 2015, versus $14 billion in 2012, as the company expands globally, focusing more on local commerce and using mobile technology to lure shoppers.

By then, its marketplaces business - which hosts external merchants - will handle $110 billion in sales volume in 2015, up from $75 billion in 2012, the executives said.

Wall Street embraced Chief Executive John Donahoe's new targets, sending eBay shares up 4.1 percent to $54.22 by the close of business on Thursday. The shares added another 0.5 percent to trade at $54.50 after hours.

"Management is clearly feeling confident about the next three years, and we would agree that they have tailwinds in both the Marketplace and payment businesses," said Colin Sebastian, an analyst at R.W. Baird.

"If they actually crack the local market opportunities, the guidance could prove conservative," he added.

After bleeding market share to Amazon.com Inc for years, eBay, under Chief Executive John Donahoe, began a turnaround effort in 2009 that put the Internet commerce company back on track by borrowing from its larger rival's playbook.

He took what was then a muddled auctions website and made it easier for shoppers to buy new items at fixed prices and get more free shipping and returns - essentially mimicking the Amazon experience. He also embraced mobile technology, creating shopping apps for smartphones and tablets that brought in new customers.   Continued...

eBay Inc President and CEO John Donahoe speaks during a hi-tech industry conference in Jerusalem September 11, 2012. REUTERS/Ronen Zvulun