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April 21 2015, 09.00am GMT


What are analysts expecting from eBay Inc. when it reports 1st quarter results on 22 April given that the previous quarter showed a surprise 5.19% increase in earnings?

eBay Inc. (NASDAQ:EBAY) will release its 1st quarter earnings on the 22 April 2015. In the last quarter, investors saw a 5.19 percent positive earnings surprise. Added to this, it’s good to note that in 3 of the four consecutive quarters, eBay has managed to average 1.74 percent in positive earnings.

In the fourth quarter, eBay’s 81 cents earnings beat Zacks Consensus Estimate. This estimate was only at 77 cents which shows a 5.2% decrease from the actual earnings. The March quarter guided earnings were also above expectations despite lower guided revenues.

Expectations for eBay’s 1st quarter revenues are between $4.35 billion and $4.45 billion which is a decline of 3.2 percent year-over-year and 10.6 percent sequentially. Zacks Consensus Estimate is at $4.70 billion, higher than eBay’s management expectation. The company’s expectations are set to generate 37 to 43 cents GAAP earnings per share (EPS) and 68 to 71 cents non-GAAP EPS. Some analysts estimate a lower EPS of 65 cents.

Job cuts have become a focus for eBay with plans to remove 2,400 jobs which totals 7% of the company’s workforce across three operating segments.

With eBay planning to spin-off PayPal, the marketplace’s business has now become more important and as a result, eBay has started implementing strengthening measures. Some of these measures, among others, have been to invest in order to improve the company’s fulfillment services, a fresh focus on mobile customers, new fixed pricing format and improving technology. To add to its growth, eBay has also focused on providing a comprehensive online solution for traditional retailers.

In order to ensure a smooth spin-off of PayPal, eBay appointed to its board two independent directors; namely, Tony Bates, president from GoPro the wearable camera maker and Gail McGovern, chief executive of the American Red Cross. An agreement that was released earlier this month states a six-year partnership between the two parties with a 1 year transition period.

The purpose of the agreement is to ensure that the now independent firms are kept alive and operating well by themselves. The agreement also restricts competition between eBay and PayPal in their primary business ventures once they have separated.

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