Earnings Preview: eBay

Apr.20.10 | About: eBay Inc. (EBAY)

eBay (NASDAQ:EBAY) is expected to report Q1 earnings after the market close on Wednesday, April 21 with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for a profit of 41c on revenue of $2.18B. The consensus range is 39c-43c for EPS and $2.06B-$2.26B for revenue, according to First Call. In January, eBay forecast Q1 EPS 39c-41c on revenue of $2.1B-$2.2B, and FY10 EPS $1.63-$1.68 vs. First Call consensus of $1.67 on revenue of $8.8B-$9.1B vs. First Call consensus of $9.12B. Barron's said in January that eBay is set for a strong year with the growing adoption of online shopping and a modest economic recovery, and the online auction site has announced plans for PayPal to double its presence in Asia by the end of the year. In addition, PayPal announced a newer, cheaper way for businesses to handle transactions that are less than $10, and eBay said it will begin selling upscale fashions through "flash sales." Also in the quarter, an appeals court found that eBay did not infringe Tiffany's (NYSE:TIF) trademark.

Analyst Views

As for quarterly results, Jefferies analyst Youssef Squali says he believes PayPal remains a bright spot for eBay, and expects the unit to notch $20.8B in payment volume, or 31% growth year-over-year. Ben Schacter, an analyst at Broadpoint, believes the company's marketplace revenue will grow 16.6% year-over-year, but says he remains "somewhat cautious" on changes implemented to tweak the fee structure and incentives for sellers.