EBay forecasts profit below estimates on stiff competition, shares fall
EBay Inc’s second-quarter profit forecast came in below market expectations as it faces fierce competition from bigger rivals including Amazon.com Inc for a slice of the pandemic-led online shopping boom, sending its shares down 6%.
While the company’s focus on its advertising and payments business and a simpler e-commerce platform have benefited its business, Amazon remains a favorite online shopping destination for most consumers.
The rise of Canada’s Shopify Inc , which smashed earnings estimates earlier on Wednesday, has also piled on the pressure on eBay.
EBay said it expected current-quarter adjusted profit in the range of 91 cents to 96 cents per share, below a Refinitiv IBES estimate of $1.02 per share.
The e-commerce boom, however, is expected to slow as vaccine rollouts and easing restrictions in the United States encourage shoppers to return to brick-and-mortar stores.
“We are right on track to where we want to be from an overall margin standpoint of the business,” Chief Executive Officer Jamie Iannone said in an interview.
The company’s operating margin rose to 27.9% in the quarter, from 26.5% a year earlier.
Shares of the San Jose, California-based company were down at $58.80 in extended trading.