Dive Brief:
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EBay Inc. Wednesday showed that it may have the chops to do it alone in its first quarterly report after the spin-off of former payments unit PayPal.
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EBay shares fell 14% since the split but rose 9% in after hours trading Wednesday. The company improved its Q4 forecast, predicting between $1.58 and $1.60 in per-share earnings for the year, improved from its expectations last quarter of $1.40 to $1.45.
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Q3 profits decreased 25% to $539 million, and revenue decreased 2% to $2.1 billion. But investors were likely cheered by the evidence that eBay is still growing, adding 2 million active buyers for a total of 159 million.
Dive Insight:
EBay isn’t out of the woods yet; many of the factors that have lowered investors’ expectations are still factors, including slow shipping times compared to the competition.
The company is taking some steps to address that, and to slim down by shedding assets like its investment in Craigslist and its third-party e-commerce platform Enterprise.
The company is also in the midst of reshaping its approach away from an emphasis on small-bore auctions of used and vintage items to fixed-price sales of new and unique ones.
Wednesday’s stock boost shows that eBay’s investors still have confidence in the company, and CEO Devin Wenig said their patience will pay off.
“We traded off short-term growth and focused more on long-term investments,” he said on a conference call with analysts, according to the New York Times. “We still have a lot of work ahead of us in order to reposition our business and to deliver the level of performance that we aspire to achieve.”