By
Bloomberg
Published
Feb 27, 2024
EBay Inc. posted a strong holiday quarter, giving investors fresh hope that the company can boost profits following steep job cuts.
The company also added $2 billion to an existing stock buyback program, increasing the total repurchase authorization to $3.4 billion.
Fourth-quarter profit was $1.07 a share on sales of $2.56 billion, the company said Tuesday in a statement. Analysts estimated $1.03 on sales of $2.51 billion.
Once an industry pioneer, the San Jose, California-based company has been losing US market share for years to the likes of Amazon.com Inc. and Walmart Inc. In an effort to be “more nimble,” eBay announced last month that it was cutting 1,000 jobs, or about 9% of its full-time workforce. That followed layoffs that affected about 500 employees in 2023.
Chief Executive Officer Jamie Iannone is trying to find niches in which the company can thrive. It sells watches, sneakers and other luxury items to appeal to collectors, and offers authentication services designed to root out counterfeits. EBay also sells refurbished appliances and car parts to appeal to cost-conscious shoppers and do-it-yourselfers.
“Our results demonstrate the strength of our strategy, and I’m proud of our accelerated pace of innovation as we work to fundamentally enhance the customer experience on eBay,” Iannone said in the statement.
Gross merchandise volume, the value of all goods sold on eBay, increased 2% to $18.6 billion in the holiday quarter, topping analysts’ average estimates of $18.2 billion. The company said it had 132 million active buyers in the quarter, down 2% from a year earlier.
Iannone also is offering more advertising and payments products for eBay merchants in an effort to offset slowing growth on the platform. Advertising revenue of $393 million topped analysts’ estimates of $375 million and helped eBay boost profits even as it lost customers.
The shares rose about 4% in extended trading after closing at $44.39 in New York. The stock has increased 1.8% this year.
The company projected earnings of $1.19 to $1.23 a share on revenue of as much as $2.54 billion in the current period ending in March. Analysts, on average, estimated profit of $1.10 per share on sales of $2.54 billion.
