EBay Shares Fall After Guidance Cut

By Michael Dabaie

EBay Inc. shares slid 9% to $49.46 in Thursday morning trading after cutting guidance on impacts from the war in Ukraine.

The online marketplace after the bell Wednesday lowered its full year revenue guidance to $9.6 billion to $9.9 billion, from a forecast of $10.3 billion to $10.5 billion in February. EBay lowered its guidance for adjusted per-share earnings to $3.90 to $4.10, from its previous outlook for $4.20 to $4.40.

"Russia and Ukraine have historically made up less than 1% of our global volume, but the war in Ukraine has measurably impacted the economic growth and consumer confidence throughout Europe and other parts of the world," Chief Financial Officer Steve Priest said in the company's conference call.

"This conflict arose as global economies were already contending with inflationary pressures and supply chain challenges. On top of that, rising interest rates may further hinder near-term economic growth, while sanctions related to the war could raise already-high fuel prices leading to additional pressure on consumer spending," Mr. Priest said.

EBay reported first-quarter revenue fell to $2.48 billion, topping the FactSet consensus for $2.46 billion.

Benchmark Street analyst Daniel L. Kurnos said in a note that EBay "became one of the latest victims of slowing consumer discretionary spend thanks to the global conflict and general macroeconomic headwinds.

"While the quarter itself was healthy, coming in above consensus and at the high end of the guidance range, management felt it prudent to reduce the near-term forecast across the board," the Benchmark note said.

Truist Securities analysts said in a research note that initiatives around improving the product experience for focus-categories while catering to "enthusiast" buyers "continue to show green shoots" with faster gross merchandise value growth in these categories.

"These improvements if sustained will take time to start materially impacting the trajectory of aggregate GMV growth and profitability, in our view, exposing investors to more execution risks," the Truist analysts said in maintaining their Hold rating on the stock.

Write to Michael Dabaie at [e-mail]

(END) Dow Jones Newswires

May 05, 2022 11:16 ET (15:16 GMT)

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