What to Expect From eBay's Earnings

Another (EBAY) quarterly earnings report is on our doorstep. I've already mentioned my financial expectations for Wednesday night (follow the Q2 earnings release here). The only thing I would add is that I expect EBAY will have continued its aggressive buyback program, which will help EPS growth outstrip revenue growth for yet another quarter. So we are looking at around 26.5% EPS growth to about $0.43 (compared to my revenue growth of 24.5% to $2.28 billion).

I also wanted to mention a few observations. The first is that my expectations are rather bullish compared to consensus (MarketWatch says analysts estimate EPS of $0.42 and revenue of $2.17 billion). The second is that EBAY has been on an M&A diet for 18 months. So despite an FX tailwind, that makes EBAY's growth that much more impressive. My final thought is that given the state of the global economy, these levels of growth are becoming increasingly rare (and EBAY's valuation discount therefore increasingly interesting).