eBay to report second-quarter earnings

Online auction site eBay is expected to report second-quarter earnings this Thursday. Analysts expect the e-commerce giant to report earnings per share of $0.58 for the quarter.

The company posted earnings per share of $0.77 in April for the quarter to March-end, beating analysts’ consensus estimate of $0.70. It had revenue of $4.45 billion for the quarter, higher than the consensus estimate of $4.42 billion.

In the same quarter last year, it reported earnings per share of $0.70.

Goldman Sachs analyst Heath Terry has forecast eBay will report revenue of $4.4 billion and adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) of $1.3 billion. "We believe the separation of the two companies will allow managements to focus on optimizing investment, execution and capital allocation. . . " he said in a note.

Mr Terry expects eBay to continue leveraging its 175 million active buyers, 25 million active sellers, over 800 million product listings and over 480 million in gross merchandise value by keeping its focus on its existing core customers.

Wall Street analysts are anticipating earnings per share of $2.61 for the current year. The company’s sales are forecast to rise from $4.3 billion to $4.4 billion this year.

This week’s earnings come one day before eBay spin-off PayPal begins trading separately. Shares in PayPal began to trade separately on a “when-issued” basis last week, but most shares will be free to trade from tomorrow onwards. The shares are scheduled to start trading under the ticker PYPL next Monday.

Analysts say an independent PayPal could strike deals with other e-commerce firms such as Amazon.com and Alibaba, while continuing to work with eBay.