Shares of eBay (NASDAQ: EBAY) were down 9.6% as of 3:15 p.m. EDT after the e-commerce leader announced reasonably solid third-quarter results but followed with a disappointing forward outlook.
Regarding the former, eBay's quarterly revenue was roughly flat on a year-over-year basis, at $2.649 billion, but would have increased 2% had it not been for the negative impact of foreign-currency exchange. On the bottom line, that translated to adjusted net income from continuing operations of $563 million, or $0.67 per share, up 19% from $0.56 per share in the same year-ago period. By comparison, revenue was within eBay's guidance range of $2.61 billion to $2.66 billion that was provided in July, while earnings arrived well above the company's target for $0.62 to $0.65 per share.
eBay interim CEO Scott Schenkel noted the company's third-quarter performance was roughly in line with internal expectations, "while improving the Marketplace experience, creating better customer outcomes, and maintaining momentum in advertising and payments."
The company's number of active buyers grew 4%, to 183 million this quarter. But revenue from its core Marketplace segment also grew a modest 1% at constant currencies, to $2.1 billion, and gross merchandise volume fell 2% at constant currencies, to $20.5 billion.
For the current fourth quarter of 2019, eBay sees revenue of between $2.77 billion and $2.82 billion, good for a change in organic currency-neutral growth of negative 1% to positive 1%, with adjusted net income per share of $0.73 to $0.76. Most analysts were modeling earnings near the top end of that range on revenue of $2.85 billion.
In the end, it's clear the market isn't pleased with that outlook. And with eBay up around 36% year to date leading into this report, it's no surprise to see the stock pulling back today in response.
10 stocks we like better than eBay
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and eBay wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 1, 2019
Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends eBay and recommends the following options: long January 2021 $18 calls on eBay. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.