eBay Barely Beats Investor Expectations With Revenue Of $3.9B, Stock Falls 5% In After-Hours Trading

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eBay reported its third-quarter financial performance today, including revenue of $3.9 billion and non-GAAP earnings per share of $0.64. The company’s revenue was up 14 percent from the same quarter last year, while its earnings per share rose 17 percent.

Analysts had expected eBay to earn $0.63 per share (non-GAAP) on revenue of $3.9 billion. In its most recent sequential quarter, eBay had revenue of $3.9 billion, and non-GAAP earnings per share of $0.63. That’s not a typo; eBay’s second-quarter performance matches earlier third-quarter predictions precisely. Put another way, eBay failed to grow sequentially, which investors might find disappointing.

eBay unit PayPal drove $1.6 billion in revenue, up 19 percent. PayPal now has 137 million members, up 17 percent. eBay’s “Enabled Commerce Volume” metric was $52 billion for the quarter, up a healthy 21 percent.

Digging into the numbers, eBay’s operating margin is now back over the 20 percent mark (20.5 percent), it generated $1.3 billion in cash during the quarter, and repurchased around $146 million of its own stock during the period. eBay ended the quarter with cash, and equivalents of $13 billion.

In regular trading, eBay fell just over 1 percent. The company is sharply down in after-hours trading.

Why is eBay falling if it managed to best expectations by a smidge? eBay stated in today’s earnings report that it expected revenue of $4.5 billion to $4.6 billion in the fourth quarter. Its non-GAAP earnings per share range is $0.79 to $0.81. The revenue figure is in line with expectations, but the EPS prediction is lower than what the street expected, which was $0.83.

It’s never good to meet investor revenue expectations with your forecast but fail to estimate a similar EPS figure, because that can imply that margins are set to worsen. It’s even tougher to say after reporting a quarter in which your earnings per share and revenue were flat sequentially.

Top Image Credit: Brian Cantoni