EBay Beats Estimates, Rallies With Top End of Profit Forecast

EBay reported robust 3rd-quarter earnings, evidence that the online marketplace’s shift to luxury items and refurbished goods could help temper declining sales.

Leveraging luxury items and refurbished goods, eBay demonstrates strong third quarter earnings. (REUTERS)

EBay Inc. reported robust third-quarter earnings, evidence that the online marketplace's shift to luxury items and refurbished goods could help temper declining sales.

The shares rose as much as 10% in extended trading.

EBay revenue decreased 5% to $2.4 billion in the period ended Sept. 30. Analysts, on average, estimated $2.32 billion. Earnings, excluding some items, were $1 per share, beating estimates of 93 cents.

Chief Executive Officer Jamie Iannone has turned to higher-priced products such as watches and brand-name sneakers to try to boost spending on the marketplace and lure more shoppers. He's also trying to make EBay the go-to place for refurbished used goods to appeal to cost-conscious shoppers adjusting to inflation. On Monday, the company announced completion of its $295 million acquisition of collectible card game marketplace TCGplayer.

Sales will be $2.42 billion to $2.5 billion in the period ending in December, the San Jose, California-based company said Wednesday in a statement. Analysts, on average, projected $2.5 billion, according to data compiled by Bloomberg. Earnings, excluding some items, will be $1.03 to $1.09 a share, in line with the average estimates of $1.07.

Last week, Amazon. com Inc. forecast its slowest ever holiday-quarter growth, sending the shares down 11% the next day.

EBay shares rose as high as $41.84 in extended trading after closing at $38.06 in New York. The stock has fallen about 40% so far this year, in line with a broader market drop.

EBay ended the quarter with 135 million active buyers, down 11% from a year earlier. Gross merchandise volume, which is the value of all goods sold on the site, fell 11% to $17.7 billion. The declines in both metrics slowed from the previous quarter.