Why eBay Stock Is Tumbling This Week
Shares of eBay (NASDAQ: EBAY) are bouncing back from what was at one point a 10.6% loss for the week, according to data from S&P Global Market Intelligence. Still, even with Friday's 5% rally, the stock is set to close nearly 6% below last week's closing price. An otherwise healthy third-quarter report was tainted by lackluster earnings guidance for the quarter now underway.
With the stock already in retreat from the all-time peak reached late in the previous week, Wednesday's post-close release of eBay's third-quarter earnings knocked another 6.7% off the stock's value during Thursday's trading. Last quarter's revenue of $2.5 billion was an 11% improvement on the year-ago comparison, and topped analyst estimates. Operating income of $0.90 per share also exceeded analysts' forecasts of $0.89, up from the year ago figure of $0.85.
Revenue guidance for between $2.57 billion and $2.62 billion for the fourth quarter of this year, however, doesn't compare favorably to the consensus estimate of $2.61 billion (and some are calling for even more). Those same analysts are also modeling a fourth-quarter profit of $0.99 per share versus the company's modest guidance of between $0.97 and $1.01 per share. While hardly problematic, investors were hoping for an outlook that was more compelling.
Source Fool.com
