eBay Inc. (NASDAQ: EBAY) is set to report its earnings after the market closes on Wednesday. Thomson Reuters has consensus earnings estimates of $0.67 per share on $4.37 billion in revenue. The third quarter from the previous year recorded $0.64 in earnings per share and $3.89 billion in revenue. The current quarter has consensus estimates of $0.91 in earnings per share and $5.17 billion in revenue.
Source: courtesy of ebay
eBay recently announced that it would spin-off PayPal into an independent public company for $7 billion in 2015. This culminated nine months of activist investor Carl Icahn driving for this split. CEO John Donahoe made the announcement in late September.
According to the press release, neither John Donahoe nor CFO Bob Swan will play an executive role in this new company or the new eBay, but they do expect to serve on the board for either or both companies.
The “new” CEO for eBay has been named as Devin Wenig, who is the president of eBay Marketplaces. The chief executive for PayPal will be Dan Schulman from American Express, where he is the president of the company’s enterprise growth group.
Shares increased more than 13% over the course of the quarter to its close of $56.63, up from the open of $50.06. However, since the end of the quarter, shares have dropped almost 11% to end Monday at $50.46.
Following the announcement of the PayPal spin-off, eBay saw a few analyst downgrades:
- J.P. Morgan downgraded eBay to Neutral.
- Jefferies downgraded it to Hold.
- JMP Securities downgraded the stock to Market Perform.
After gapping up in October following the announced plans to spin off PayPal, the stock has fallen from over $57 to under $50, blowing through its 50-day and 200-day moving averages a week ago. Interestingly, the stock is approaching the lows seen in June and as far back as November.
Shares of eBay were trading down over 2% Wednesday to $49.46, from the previous close of $50.59. This drop is primarily attributable to the broad markets falling around 2%.
The stock has a consensus analyst price target of $60.89 and a 52-week trading range of $48.06 to $59.70. eBay has a market cap of $63 billion.
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