Ebay Inc (EBAY) Stock Falls on Weak Guidance

Ebay first quarter profit and revenue grow, but forecasts second quarter profit will fall below expectations

eBay reports $2.2bn in Q1 revenue, buoyed by UX, advertising efforts

Investors didn't buy what eBay was selling Thursday after the e-commerce leader gave a weaker-than-expected earnings and sales outlook that took some of the shine off of the company's upbeat first-quarter results. (NASDAQ:EBAY) was down -0.48% during the last trading session, with a day high of 34.34. The shares were sold at an average price of $33.25, for a total value of $221,445.00.

Looking ahead, eBay sees Q2 revenue of $2.28B-$2.32B vs. $2.32B consensus and FY17 revenue of $9.3B-$9.5B vs. $9.41B consensus.

Net income jumped to $1.04bn, or 94 cents per share, from $482m, or 41 cents per share. Another cause for concern was the 7.5% y-o-y decline in free cash flows due to declining cash flows from operations. Share repurchases were $350 million in the quarter.

The better-than-expected results were driven by strength in global markets, growth of active buyers, integration of the Ticketbis acquisition, expansion of new user experience and brand advertising. eBay added 2 million active buyers in the first quarter taking the total to 169 million. "We just think this is a way to stick our competitive advantage right out there and have no questions about why people shop on eBay and why they should". Marketplace GMV was up 2% on an as-reported basis and 5% on an FX-Neutral basis, driven by growth of active buyers, continued expansion of new user experiences and brand advertising, which led to revenue growth of 2% on an as-reported basis and 5% on an FX-Neutral basis.

Online ticket exchange StubHub drove GMV of $916m, up 6%, and revenue of $210m, up 18% on an as-reported basis, aided by strength in worldwide markets with the integration of the ticket-selling platform Ticketbis.

Classifieds platforms also performed well with contribution of $199 million of revenues, up 7% year over year on a reported basis and 10% on an FX-Neutral basis. The company also began the roll out of a new, personalized homepage and declared new services that will be available later this year, counting a Guaranteed Delivery program on millions of eligible items that arrive in three days or less, and an authentication program to boost consumer confidence when purchasing high-end merchandise. Classifieds launched a personalized homepage feed on Marktplaats.nl and continued integrating inventory with the Marketplace platform across multiple regions.

eBay recently announced a strategic agreement with Flipkart. The companies will also exclusively pursue cross-border trade opportunities together.

Adjusted operating expenses of $1.1 billion increased 10.4% from the prior-year quarter but decreased 5.2% sequentially. Non-GAAP net income from continuing operations was $538 million, or $0.49 per diluted share. This is up from the $2.12 billion that was reported in the first quarter of 2016.

For the first quarter.

eBay's balance sheet is highly leveraged, with total debt of $9 billion eclipsing cash and short-term investments balance of $6.8 billion.

E-commerce platform eBay reported Q1 revenue was $2.2bn, up 4% on an as-reported basis.

Have more questions about Ebay? The return on assets ratio of the Company was 34.60% while its return on investment ratio was 30.60%.

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