EBay increases the forecast as redesign draws customers, increases advertising revenue
By Arjun Panchadar
(Reuters) – EBay Inc increased its full-year sales and profit forecasts on Tuesday, as user-friendly changes in their e-commerce platforms attracted more customers and increased their advertising revenue.
The Company is facing intense competition from Amazon.com Inc and Walmart Inc, focusing on its promotional program and payment business, as well as efforts to make the platform easier to use through the introduction of grouped listings and personalized recommendations.
More than 800,000 active salespeople took advantage of the advancement in the first quarter, contributing more than double the advertising revenue to over $ 65 million.
Chief Executive Officer Devin Wenig on a call for service reiterated that the company reduced third-party ads that were not acclimatized and kept on their way to a $ 1 billion advertising revenue opportunity.
The results come as eBay is in the midst of a review of StubHub and eBay Classifieds companies by activist investor pressure.
San Jose, California-based company has also agreed to appoint two new board members as part of an agreement with activist investors Starboard Value and Elliott Management.
"We look at the pace and increase as a positive reflection of management's efforts, before the activist's involvement, to improve the operating results – including expanding the efforts in advertising and payments," said Tom Forte, an DA Davidson analyst.
eBay's shares increased by 5 percent in extended trading after the company also posted results and estimates for the first quarter.
The company increased its full-year revenue forecast to vary between $ 10.83 billion and $ 10.93 billion, and the result is between $ 2.64 per share and $ 2.70 per share.
Net sales rose 2.4 percent to $ 2.64 billion in the first quarter ended March 31, beating analysts' average estimate of $ 2.58 billion, according to IBIN data from Refinitiv.
EBay active players grew 4 percent to 180 million in the quarter. However, the company's gross merchandise volume, which is the value of goods sold on its website within a certain timeframe, fell 4.2 percent to $ 22.59 billion.
Only eBay achieved 67 cents per share and hit 63 cents per share estimates.
(Reporting of Arjun Panchadar in Bengaluru; Editing of Sriraj Kalluvila)
