кредитный займ на карту
Home » Business, Company, Financial, Technology, U.S.

eBay Inc (NASDAQ:EBAY) Is Lacking Growth On The Eve Of PayPal Split

Written by on July 16, 2015

The 2Q2015 results of eBay Inc (NASDAQ:EBAY) showed slowing growth even as it beat estimates. This is the final time eBay’s earnings results include PayPal as they’ll start trading as two separate companies from Monday.

PayPal (Payments Business Unit)’s revenue increased 16% to reach $2.26 billion while Net Total Payments Volume reached almost $66 billion, an increase of 20% from 2Q2014 but Marketplaces revenue declined 3% to reach $2.1 billion. Gross Merchandise Volume (GMV) was at $20 billion, a decline of 2% compared to 2Q2014.

EBay also announced selling its EBay Enterprise warehouse and logistics business for $925 million, likely buyers being a consortium led by private equity firm Permira.

EBay is taking a charge of about $786 million based on the “expected sales proceeds.”

Ebay’s net income in the second quarter fell sharply to $83 million (a drop of 88% from 2Q2014), but that was attributable to write-offs for anticipated sales and discontinued operations.

EBay’s incoming post-split CEO Devin Wenig said eBay was still struggling to win back users affected by the cyber attack in May of last year.

The market valued PayPal at $45.4bn at the close of trading on Wednesday, compared to $31.5bn for eBay. The stock is trading 3% up on Thursday with the combined entity having a market capitalization of $76.5 billion.

The combined company’s revenue rose 7% from 2Q2014 to $4.38 billion, short of analysts’ consensus forecast of $4.49 billion. After the split, 2,400 employees will be let go. The challenges for eBay have included reduced online traffic after Google made changes to it algorithms and competition from Amazon. As Wal-Mart and other offline businesses turn their attention to the online marketplace, eBay’s competition will only grow.

The PayPal split is happening to some extent because of pressure from activist investor Carl Icahn. EBay has revenue of around $80 billion with more than 150 million buyers visiting the site.

After the split, eBay forecasts annual earnings of $1.72 to $1.77 a share, excluding some items while sales are forecast to grow 3 to 5% excluding currency effects. PayPal’s estimated annual earnings are $1.23 to $1.27 a share, excluding items, with expected sales growth of 15 to 18%.