Earnings Preview: eBay

eBay (NASDAQ:EBAY) is expected to report Q4 earnings after the market close on Wednesday, January 18 with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for EPS of 57c on revenue of $3.32B. The consensus range is 54c-59c for EPS, and $3.22B-$3.44B for revenue, according to First Call. In October, eBay guided Q4 EPS 55c-58c on revenue $3.2B-$3.35B. The company also forecast FY11 EPS $1.98-$2.01 vs. consensus $2.00 on revenue $11.5B-$11.6B vs. consensus $11.59B. eBay CEO John Donahoe forecast that the company would reach $8B in mobile gross merchandise volume and that PayPal will reach $7B in transactions this year, reported TechCrunch, citing the executive's address at the Consumer Electronics Show. Earlier this month, Yahoo (YHOO) named PayPal President Scott Thompson as its new CEO, and CEO John Donahoe was named as interim PayPal President.

Analyst Views

Collins Stewart views eBay's loss of Scott Thompson to Yahoo! as an incremental negative for eBay as the loss could slow down PayPal's growth rate in 2012. However, Collins believes eBay's business continues to be strong. Argus expects PayPal's growth over the next few years to be more based on execution than strategy. The firm expects eBay's margins to increase this year. eBay is worth $40B and if the company were to separate PayPal, its online payments unit, that would boost the combined value of the entities by as much as 30%, according to data compiled by Huntington Asset Advisors and Bloomberg. Bernstein expects eBay will report stronger than expected results, benefiting from growth in PayPal and changes in its Marketplaces business. Deutsche Bank believes that while eBay's Q4 results are likely to be in-line to slightly better than consensus estimates, underlying weakness will be seen at the company in 2012 as the U.S. dollar strengthens and comps get tougher.

Comments

[Philip Cohen]

.“… when foreign exchange is removed, eBay GMV growth rate for Q2-2011 is 10%, Q3-2011 is 11%, and Q4-2011 is 10%.”—auctionbytes.com

As usual, Donahoe is thrashing around in the quick sand of his own making, and the eBay marketplace is continuing its stagnation compared to ecommerce in general.

Amongst the analysts, Deutsche Bank’s Jeetil Patel is still the only one that has over time consistently been wary of eBay and again yesterday said, “sell”.

“When Do We Start Calling eBay A Payments Company?”

http://read.bi/wojewE

This article contains an interesting graph of eBay revenues since 2003. It shows quite starkly how eBay’s marketplace revenue has stagnated since 2007, about the time that the headless turkey, John Donahoe, got hold of the tiller and started his “destructive” innovations.

The graph also shows the increases in revenue received from PreyPal during the same period, that is, from when Donahoe effectively mandated PreyPal’s use on the eBay marketplace.

Unfortunately for eBay’s chief headless turkey, Visa’s “V.me”, when it is up and running later this year, will undoubtedly put paid to any small success that the clunky PreyPal has had outside of its mandated use on the eBay marketplace, and soon thereafter both these unscrupulous and clunky entities will commence their long-deserved journeys down the gurgler.

PayPal claims PayPal Is Not a Payments Processor!
http://bit.ly/nt60Dq

eBay / PayPal / Donahoe: Dead Men Walking

[Philip Cohen]

Wot! What I would like to know is why it is that it is usually only Deutsche Bank that can see through all the PR nonsense that constantly spews from the eBay Dept of Spin. Indeed I suspect that DB also sees the Visa "V.me" iceberg ahead and that the Captain Queeg, at the tiller of eBay, is steering the clunky uss "PreyPal" directly towards it ...

eBay / PayPal / Donahoe: Dead Men Walking