EBay Inc (EBAY.O) beat Wall Street estimates for quarterly profit on Tuesday and raised its full-year outlook, as the e-commerce company benefited from a surge in online shopping by people staying indoors due to coronavirus-driven lockdowns.
Business has been booming for e-commerce firms and companies with strong online presence as the COVID-19 pandemic has led more people to use their mobile phones and computers to shop.
Ebay now expects full-year adjusted profit between $3.47 and $3.59 per share. Analysts were expecting $3.51 per share, according to IBES data from Refinitiv.
Wedbush analyst Ygal Arounian said that e-commerce related stocks have largely outperformed since the beginning of the pandemic and expectations are really high.
“It’s not a surprise to see some weakness on results,” Arounian added.
Shares of eBay, which have surged about 56% so far this year, fell nearly 3% to $54.75 in extended trade.
The company last week agreed to sell its classified ads business to Norway’s Adevinta ADEV.OL in a deal worth $9.2 billion, succumbing to longstanding pressure from activist investors Elliott Management Corp and Starboard Value.
Pressure from the activist investors also resulted in the company naming Walmart (WMT.N) executive Jamie Iannone as its top boss in April, handing over the reins to an outsider.
“I think the stock is down due to … some concern that the new CEO might reinvest some of the recent upside to try to strengthen the company’s competitive position,” Atlantic Equities analyst James Cordwell said.
Revenue rose to $2.87 billion in the second quarter, from $2.42 billion a year-ago, beating analysts’ estimate of about $2.8 billion.
Excluding items, the company earned $1.08 per share, above estimates of $1.06 per share.