As eBay continues to work through a restructuring strategy, the e-commerce market and online auction pioneer reported earnings for the first quarter of the year that should keep some of the more activist shareholders a small at claim. The company reported revenues of $2.6 billion and non-GAAP net income of $608 million, or diluted earnings per share of $0.67 ($0.57 EPS on a gaap basis).
Both numbers, in fact, exceeded analysts’ estimates. On average, they had predicted eBay to report EPS of $0.63 per share (on a range of $0.58 to $0.64) on revenues of $2.58 billion (range of $2.55 billion to $2.63 billion).
“We delivered a hard first quarter with revenue and EPS,” said Devin Wenig, president and CEO of eBay Inc., in a statement. “Our initiatives to create a next era payment and advertising experience are on track, we saw healthy buyer growth and disciplined cost regulate, and we continue to simplify the buying process while remaining focused on seller’s victory.”
That doesn’t mean the company is really out of hot water, though: a year ago, eBay had $2.58 billion in sales, so today’s figures represent barely any growth in overall sales at the company, which has been struggling to contest against a plethora of brick-and-mortar companies that have seized the online opportunity, and of course its age-old opposition, Amazon. (Although eBay already hived off PayPal years ago, activist shareholders now argue that eBay should be restructured and broken up even further.)
Indeed, the advice eBay is providing for the quarter and full year ahead speaks to those challenges. It expects in Q2 to post revenues of between $2.64 billion and $2.69 billion, growth of just two percent to four percent, with non-GAAP earnings per diluted share from continuing operations in the range of $0.61 – $0.63. Full-year revenues are projected by eBay to be between $10.83 billion and $10.93 billion, growth of between two and three percent.
The company has made a shift in its strategy in the last few months to focus back on its own inventory and leverage the tech it has in advertising to promote it acceptable. a few weeks ago, we reported on how it was shutting down one of its advertising efforts, the eBay Commerce Network, in assist of that strategy. It has also laid off several hundred people as it scales back some of those operations.
EBay said that in Q1, active buyers were up four percent across its platforms and now total 180 million intercontinental active buyers. (It has made a lot of moves to encourage more people to buy on the platform, such as adding brand-new payment methods like Google Pay, and improving the process by which a buyer can report dissatisfaction with a buy.)
market accounted for the bulk of revenues, at $2.2 billion of revenue and $21.6 billion of GMV. That GMV is actually down four percent on a year ago, even as market revenues were up three percent.
StubHub accounted for $230 million of revenues, a flat figure on last year. Classifieds accounted for $256 million in sales. Advertising, meanwhile, will remain a gigantic boat to turn around: this quarter it accounted for a mere $65 million of revenue, although that was up 110 percent year-over-year.