eBay shares tumble as Q1 revenue guidance disappoints

Investing.com - Shares in eBay (NASDAQ: EBAY) plunged 8% in premarket trading Thursday after the e-commerce giant provided weaker-than-expected revenue guidance for the first quarter, overshadowing its fourth-quarter earnings beat.

The company reported fourth-quarter adjusted earnings per share of $1.25, surpassing analyst estimates of $1.21. Revenue for the quarter came in at $2.6 billion, slightly above the consensus estimate of $2.58 billion and up 1% YoY on both an as-reported and FX-neutral basis.

However, eBay’s outlook for the first quarter of 2025 disappointed investors. The company forecasts revenue between $2.52 billion and $2.56 billion, below the analyst consensus of $2.6 billion. This guidance implies a range of -1% to 1% YoY growth on an FX-neutral basis.

Lingering inflationary pressures and elevated interest rates have weighed on consumer spending for much of the past two years, hitting demand for more expensive non-essential items.

In a post-earnings call, CFO Steve Priest flagged that the macroeconomic environment is "challenging," pointing in particular to uncertainties "around U.S. tariffs and de minimis changes." The U.S. has recently moved to halt a rule allowing items valued under the $800 "de minimis" threshold to enter the country duty free. Cut-price retailers like Temu and Shein have relied on the exception.

Gross merchandise volume (GMV) at eBay for the fourth quarter was $19.3 billion, up 4% on an as-reported basis and 3% on an FX-neutral basis. Overall, advertising offerings generated $445 million in revenue during the quarter, representing 2.3% of GMV.

For the first quarter, eBay expects adjusted earnings per share between $1.32 and $1.36, compared to the analyst consensus of $1.33.

The company repurchased $900 million of its common stock in the fourth quarter and paid $128 million in cash dividends. Its board declared a cash dividend of $0.29 per share, payable on March 28.

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