EBay holiday-quarter revenue up 3.1 percent, shares jump

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(Reuters) – EBay Inc (EBAY.O) reported a 3.1 percent rise in quarterly revenue for the fourth-quarter holiday period, offering signs of improvement at the company’s traditional marketplace business and sending shares up more than 8 percent in extended trading on Wednesday.

EBay, once synonymous with online auctions, has been revamping its platform to help compete better with bigger e-commerce rival Amazon.com Inc (AMZN.O) as well as traditional retailers. Fixed-price goods now make up a much larger portion of its listings than previously.

“It is a turnaround process for the company, and there are some decent metrics in there,” for the marketplace division, said BGC Partners analyst Colin Gillis. Earnings and revenue for the quarter both were in line with expectations.

The company forecast first-quarter adjusted profit of 46 cents to 48 cents per share, below analysts’ average estimate of 50 cents, according to I/B/E/S.

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A full-year forecast of adjusted profit of $ 1.98 to $ 2.03 per share missed estimates of $ 2.06 per share. But the top end of its forecast of $ 9.3 billion to $ 9.5 billion in revenue was ahead of the analyst consensus of $ 9.36 billion.

EBay also said it had repurchased $ 1 billion in shares over the quarter.

“EBay doubled their quarterly rate of share buybacks in Q4, and 2017 revenue guidance implies a re-acceleration of marketplace growth, which indicates the company is confident their structured data initiative can help stem the rate of market share losses,” said Wedbush Securities analyst Aaron Turner.

EBay, which spun off its main growth engine PayPal Holdings Inc (PYPL.O) in 2015, has revamped its platform to offer a bigger selection of products and brands.

The company now also requires sellers to give more details on items to attract younger shoppers and has been cutting listing costs.

Although turning around, the marketplace is “still a laggard,” added Gillis, noting that 4 percent revenue growth for eBay’s marketplace, accounting for foreign exchange rate changes, paled in comparison to e-commerce growth at an estimated 15 percent.

The company said its gross merchandise volume, or the total value of all goods sold on its sites, rose 2.2 percent to $ 22.34 billion in the quarter.

The company’s net income rose to $ 5.94 billion, or $ 5.30 per share, in the fourth quarter ended Dec. 31, from $ 477 million, or 39 cents per share, a year earlier.

The boost in net income was driven by a non-cash $ 4.6 billion income tax benefit related to a change in legal structure, mostly impacting its international entities.

(Reporting by Anya George Tharakan in Bengaluru and Jeffrey Dastin in ; Editing by Shounak Dasgupta, Peter Henderson and Bill Rigby)

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