eBay warns about Q4, shares down 5.4%
Shares in the e-commerce platform eBay closed in on 13-month lows, all-sessions on the IG platform, last night after it forecast fourth quarter earnings below estimates.
Like a lot of e-commerce platforms recently it sounded the alarm on weaker-than-expected consumer spending. High-interest rates and stubborn inflation across major economies in Europe as well as in the United States have further eaten into consumers' discretionary budgets. On an adjusted basis, eBay earned $1.03 per share, compared with estimates of $1. Third quarter revenue rose 5% to $2.50 billion, in line with expectations, as the company saw an uptick in demand for refurbished goods. But it was the outlook that raised alarm bells as it said it now expects current quarter adjusted profit per share in the range of $1 to $1.05, compared with estimates of $1.04.
(AI Video Transcript)
eBay's earnings per share
eBay, an online shopping platform, revealed its financial performance for the third quarter. The company had better results than anticipated, but investors were worried about the future because of concerns about consumer behavior. eBay mentioned that consumer spending was lower than expected, primarily due to high interest rates and inflation in major economies. Although eBay's earnings per share and revenues were on par with expectations, investors were focused on the uncertain outlook.
eBay stock price
When we look at the chart, we can see that eBay's performance disappointed the market. The company's shares dropped, reflecting investor concerns. In fact, the current stock prices were close to recent lows and even briefly fell below them. If we consider the previous year, eBay has had a tough time and faced challenges. More people are using the platform to sell used items and earn extra income. However, eBay is not reaching the level of user engagement and activity it had hoped for. Adding to the worries is the bleak outlook for the fourth quarter.
The main problem lies in consumer behavior and how economic factors affect their discretionary spending. Rising interest rates and persistent inflation have limited consumer spending in Europe and the United States. eBay's concerns are not unique to the platform; other online shopping platforms are also experiencing weaker consumer spending.
eBay's outlook
To sum it up, eBay had better-than-expected results for the third quarter, but the market was concerned about the company's outlook. Economic factors, such as high interest rates and inflation, have impacted consumer behavior and therefore affected eBay's performance. Despite some people using the platform to sell second-hand goods, eBay is still struggling to attract enough users. This issue of consumer behavior and economic factors extends beyond eBay and affects other online shopping platforms as well.
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