EBay’s stock dropped in after-hours trading Wednesday after its outlook for the present quarter went down below Wall Street’s expectations. The company’s earnings and revenue in the first quarter increased as consumers shop online for everything.
PayPal, which is eBay’s payments unit, continued its fast upward trend and has expanded beyond the web. Consumers can now use their PayPal accounts to buy stuff in specific brick-and-mortar stores. But despite its performance, eBay’s revenue as well as its guidance for the present quarter dropped below Wall Street’s expectations. The company’s full year guidance remained the same.
EBay’s stock fell by $1.60 to $54.50 in after-hours trading. The stock closed down 91 cents at $56.10 in the regular market session as the general market declined. Its stock is up 10 percent since the start of 2013 and more than 55 percent compared to a year ago.
EBay’s 2013 earnings forecast surpassed and revenue outlook was within the expectations of Wall Street. This indicated that the second half of the year could be stronger than the first. The company issued an upbeat long term forecast as it expects revenue to reach as high as $23.5 billion in 2015, which is up from 67 percent from $14.1 billion in 2012.
EBay president and CEO John Donahue said he wouldn’t call the company’s second quarter guidance cautious. He added that it is still consistent with their expectations. He also said that the company’s business in Europe was modestly softer than expected due to the economic uncertainty in the region. The US was slightly stronger than what was expected.
The company said its revenue at PayPal went up 18 percent to $1.55 billion and closed the quarter with 128 million registered accounts, which is up 16 percent from the previous year. Its marketplaces unit, which includes eBay.com, increased revenue by 13 percent to $1.96 billion. It ended the quarter with 116 million active users.