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Companies and Brands

A Maturing eBay Earnings Story, at 20-Times Earnings

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By Jon C. Ogg Updated Published
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eBay Inc. (NASDAQ: EBAY) investors have a lot to digest today after the online auction and marketplaces giant reported earnings. eBay’s earnings in the third quarter came to $718 million, or $0.55 per share outside of items, and revenue rose to $3.4 billion from $3 billion a year ago. Thomson Reuters was calling for earnings of $0.54 per share and $3.41 billion in sales.

For its fourth quarter, eBay’s guidance came to $0.66 to $0.69 EPS on revenue of $3.85 billion to $4 billion. Thomson Reuters has estimates of $0.68 EPS and $3.94 billion in revenue. Today’s results and its guidance are in-line with estimates enough that this offers investors very little expectation for a huge surprise one way or the other.

eBay shares closed down 4-cents at $48.20 on the day. Unfortunately, that is 20.5-times the $2.34 per share earnings consensus from Thomson Reuters. That seems like too high of an earnings multiple on the surface, but that is for 15% growth to earnings and 20% growth in revenue.

eBay shares are down 0.4% at $48.00 in the after-hours session and the 52-week trading range is $28.15 to $50.65.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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