EBAY posted a strong holiday quarter, giving investors fresh hope that the company can boost profits following steep job cuts.
The company also added US$2 billion to an existing stock buyback programme, increasing the total repurchase authorisation to US$3.4 billion.
Fourth-quarter profit was US$1.07 a share on sales of US$2.56 billion, the company said on Tuesday (Feb 27). Analysts estimated US$1.03 on sales of US$2.51 billion.
Once an industry pioneer, the San Jose, California-based company has been losing United States market share for years to the likes of Amazon.com and Walmart. In an effort to be “more nimble”, eBay announced last month that it was cutting 1,000 jobs or about 9 per cent of its full-time workforce. That followed layoffs that affected about 500 employees in 2023.
Chief executive officer Jamie Iannone is trying to find niches in which the company can thrive. It sells watches, sneakers and other luxury items to appeal to collectors, and offers authentication services designed to root out counterfeits. eBay also sells refurbished appliances and car parts to appeal to cost-conscious shoppers and do-it-yourselfers.
“Our results demonstrate the strength of our strategy, and I’m proud of our accelerated pace of innovation as we work to fundamentally enhance the customer experience on eBay,” Iannone said.
Gross merchandise volume, the value of all goods sold on eBay, increased 2 per cent to US$18.6 billion in the holiday quarter, topping analysts’ average estimates of US$18.2 billion. The company said it had 132 million active buyers in the quarter, down 2 per cent from a year earlier.
Iannone also is offering more advertising and payment products for eBay merchants in an effort to offset slowing growth on the platform. Advertising revenue of US$393 million topped analysts’ estimates of US$375 million and helped eBay boost profits even as it lost customers.
The shares rose about 4 per cent in extended trading after closing at US$44.39 in New York. The stock has increased 1.8 per cent this year.
The company projected earnings of US$1.19 to US$1.23 a share on revenue of as much as US$2.5 billion in the current period ending in March. Analysts, on average, estimated a profit of US$1.10 per share on sales of US$2.5 billion. BLOOMBERG
