Third Quarter Earnings Report Nov. 7, Online Retailer eBayEBAY It forecast earnings and revenue for the current quarter below Street expectations, citing a pullback in consumer spending amid macroeconomic concerns.
“We have seen weakening year-to-date consumption trends in the fourth quarter, and particular challenges in Europe, suggesting we may see a more moderate seasonal rebound over the holidays,” CEO Jamie Iannone told investors at the company’s earnings conference call. “We are focused on controlling what we can control, being prudent with our costs and continuing to drive innovation for our customers.”
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The company reported a 5% increase in revenue for the quarter to $2.5 billion, roughly in line with analyst expectations. Likewise, adjusted earnings of $1.03 per share were in line with Street estimates.
eBay said in a statement which returned more than $780 million to shareholders during the quarter, including $132 million in cash dividends.
eBay shares plunged following the report, hitting a new 52-week low of $37.17 on Wednesday. The stock is down more than 4%.
CNBCJim Cramer, pointing to weak consumer demand and suboptimal free cash flow, said in response to the report that he is “done” with eBay.
“There are certain words that you see and say, ‘Listen, I have to sell,'” Cramer said, noting the company’s concern about uncertainty about volume and the global economy. “I’d rather be at CostcoCOSTI prefer to be on AmazonAMZNI’d rather be at WalmartWMT“.
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Analysts’ average price target for eBay is set at $45.50. The current analyst consensus recommends that investors hold the stock.
“This is a retailer. They’re not an upstart. But I think the eBay file is done,” Cramer said. “I want you to stick a fork in it. You stick a fork in eBay. That’s enough. That’s enough. Can you disappoint me forever? At some point, I’ll kick you off my screen.”
EBay’s struggles with high interest rates and a challenging macroeconomic environment are not unique; However, they pose a potentially bigger problem as the company struggles to compete with Amazon.
Amazon reported revenue of $512 billion in 2022, multiples above eBay’s revenue of $10 billion for the year.
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