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 Investors had been braced for a tough quarter.
Ebay's stock has fallen more than 8 percent since April, hurt by the
cyber attack disclosed in May that compromised data for some 145
million customers, the departure of highly regarded PayPal chief
David Marcus, and intensifying competition from both online and
offline rivals.
EBay was also hurt by a change in Google Inc's algorithm, which
pushed eBay results lower in search rankings, slowing traffic.
That slowdown was seen in June in a measure of transactions across
eBay's core Marketplaces platform, known as gross merchandise value,
with the growth rate falling to 7 percent from around a double-digit
pace in previous months.
"We had a challenging first half of the year with several
distractions," Bob Swan, the chief financial officer, told analysts
on a conference call, noting that the cyber attack and the Google
search engine changes "had an immediate and dramatic impact."
Executives said eBay will spend more on measures to entice users
back, including coupons, seller incentives and increased marketing.
Several investment brokerages had downgraded their forecasts ahead
of Wednesday's results. The second-quarter results and eBay's
revenue outlook were roughly in line with those tempered
expectations. Revenue rose to $4.37 billion for the quarter,
compared with $3.88 billion a year ago; Wall Street had forecast
revenue of $4.38 billion, on average.
Payment volume leaped a better-than-expected 29 percent. Gross
merchandise value grew 12 percent, in line with or slightly better
than analysts' forecasts.
Going forward, eBay will have to grapple with stiffening competition
across its businesses.
Marcus departed for Facebook's messaging team in June. The payments
service faces a growing challenge from the likes of Amazon, which
launched a recurring payments program in June. Google is also
expected to delve further into this field. Brick-and-mortar
retailers are investing to boost their online presence. EBay also
has to fend off a growing coterie of fast-growing retail upstarts
that focus on specific categories such as home and apparel.
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Longer term, industry analysts speculate that Chinese e-commerce
giant Alibaba Group Holdings Ltd, which is going public this year in
what could be the largest-ever tech IPO, is preparing to leverage
its U.S. investments into a play for the U.S. retail arena, the
world's largest.
On Wednesday, eBay forecast third-quarter revenue of $4.3 billion to
$4.4 billion, compared with expectations for $4.4 billion, according
to Thomson Reuters I/B/E/S.
For the second quarter, it posted non-GAAP earnings per share of 69
cents, a penny better than forecasts for 68 cents.
Shares in eBay rose slightly to $50.94 after hours, from a close at
$50.70 on the Nasdaq.
(Reporting by Edwin Chan; Editing by Richard Chang and Leslie Adler)
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