Home eBay Beats Earnings Estimates As It Wraps Reorganization
August 13, 2021
eBay Beats Earnings Estimates As It Wraps Reorganization
Posted In: Retail Articles

By Mike Duff

Contributing Editor

The second quarter saw eBay beat Wall Street analyst estimates on earnings, even if sales were a little short of expectations, as the company winds down transactions that will leave it focused on the core operation.

Second-quarter net income from continuing operations was $294 million, or 43 cents per diluted share, versus $689 million, or 97 cents per diluted share, in the year-earlier period.

Adjusted for one-time charges, net income from continuing operations was $675 million, or 99 cents per diluted share, versus $702 million, or 99 cents per diluted share, in the year-before quarter, the company reported

eBay’s adjusted diluted earnings per share from continuing operations beat a Yahoo Finance-published analyst average estimate of 95 cents.

Net revenues were $2.67 billion, with net transactions at $2.45 billion and marketing services and other revenues at $172 million versus $2.34 billion, $2.19 billion and $152 million, respectively, in the year-prior quarter. Analysts called for net revenues of about $3 billion.

Business highlights in the quarter were, according to eBay:

  • Transfer of the company’s classifieds business to Adevinta in exchange for $2.5 billion in cash and a 44% equity stake in Adevinta, equivalent to approximately 540 million shares. With the transfer complete, eBay updated its capital allocation plans for 2021 by increasing its estimated share buyback from $2 billion to $5 billion.
  • The company entered into an agreement with Permira to sell 135 million shares of its stake in Adevinta for more than $2.4 billion of estimated total consideration. The sale reduces eBay’s ownership in Adevinta to 33%, which satisfied its commitment to the Austrian regulators made as a condition of the classifieds sale. The deal includes the announced sale of 125 million shares and the option of approximately 10 million additional shares, which was exercised by Permira.
  • The company reached an agreement with Emart for the purchase of eBay’s business in Korea, which includes eBay’s selling of an 80.01% stake in its Korean businesses for 3.44 trillion KRW or $3 billion of gross cash proceeds.
  • The company named Steve Priest CFO and Stefanie Jay as chief business and strategy officer.

Jamie Iannone, eBay CEO, said, “In Q2, on an apples-to-apples basis, all key business metrics met or exceeded expectations and revenue growth was driven by the acceleration in our payments migration and growth in advertising. During the quarter, we hit several important milestones in our ongoing transformation, including the transition of eBay’s classifieds business, a deal that has already delivered exceptional shareholder value, and the announcement of the sale of our Korean business. We are simplifying our portfolio and growing our core while delivering significant shareholder value. We remain relentlessly focused on accelerating our product innovation by harnessing the power of next-gen technology and creating a more seamless experience for sellers. We are delivering innovative category experiences for buyers and quickly evolving in our pursuit to be the best global marketplace to sell and buy.”

 

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