EBay holiday outlook disappoints, shares down
EBay Paypal - Anti-trust lawsuits still on the horizon - sellers REVOLT!
By Alexandria Sage
SAN FRANCISCO (Reuters) - EBay Inc (EBAY.O) forecast results for the fourth quarter at the low end of Wall Street estimates, disappointing investors who were hoping for a substantial turnaround for the holidays, and its shares down 5 percent.
But the global e-commerce and payments company's fourth-quarter outlook only included a partial contribution from Skype, the fast-growing Web telephone unit it plans to sell in coming weeks. Analysts said that might have made its fourth-quarter forecast appear lackluster to investors.
Investors had warmed to the idea of a comeback by eBay, which is overhauling its main marketplaces division. Since January, the company's stock had shot up 79 percent after years of languishing.
But its forecast on Wednesday put a dent in that confidence, even though executives and analysts highlighted improvements such as more fixed price sales, which helped increase volume on eBay.
"The economy we see stable, and we're cautiously optimistic about consumer spending going into the holiday," said Chief Executive John Donahoe. "What is more important from our standpoint is we actually see some progress on our turnaround metrics."
For the fourth quarter, eBay sees adjusted earnings to range between 38 cents to 40 cents per share. Wall Street had been expecting 40 cents per share. It expects fourth-quarter revenues of between $2.2 billion and $2.3 billion. Wall Street's estimate is for $2.57 billion, according to Thomson Reuters I/B/E/S.
However, executives said that if Skype's full contribution were to be factored in, on an apples-to-apples basis, its holiday quarter projection called for revenue growth of 11 to 16 percent.
From the year-ago revenue figure, that translates roughly into revenue of $2.35 billion to $2.45 billion -- still short of Wall Street's average estimate.
RBC Capital's Stephen Ju estimates Skype yields $200 million of revenue a quarter.
"EBay has a long history of providing very conservative guidance and then breaking it, but people were hoping for evidence of much more recovery," said Bernstein Research's Jeffrey Lindsay.
WAGING A WAR
Skype aside, EBay faces a fierce price war among retailers on- and off-line during the holidays. Wal-Mart Stores Inc (WMT.N) pledged on Wednesday "hundreds of millions of dollars" in price cuts each week, pressuring shares in its rivals from Amazon.com Inc (AMZN.O) to Safeway Inc (SWY.N).
But Donahoe argued the company's decision to focus on the secondary market, with sellers offering out-of-season goods at a discount, would help differentiate it this holiday.
Executives, as well as analysts, pointed to a 7 percent increase in gross merchandise volume -- measuring the dollar amount of all goods sold on eBay -- that was stronger than expected.
While the overall marketplaces unit saw a one percent revenue decline in the quarter, that was a vast improvement over the prior quarter, when it fell 14 percent.
by L. Sinclair / NYC
Paypal determines the true winner of disputes on Ebay and sites which paypal is used. Regardless of Paypal's own rules, in writing, paypal can determine when and if a seller is reimbursed after a dispute.
Paypal 76% of the time sides with the buyer.
Logically, there must be sellers in order for buyers to buy.
But buyers know the tricks. DISPUTE. The monetary payment is frozen in the seller acount. The buyer can return item and be refunded. The buyer can also enter a bogus tracking number and be refunded.
Paypal disregards their own terms and deadlines. The allow the buyer extra days to come up with a tracking number. They allow even more days to verify the mostly bogus tracking numbers.
Tracking numbers are given by the USP and can instantly be retrieved via www.usps.com in approximately 3 seconds. Paypal allows an extra 10 days for that.
"There are hopes that the seller will just say forget it and close case."
When that happens, buyer gets a free-be. Seller is still charged the fee and the real MONEY winner is PAYPAL. The government has shown sporadic interest in investigation - but now more and more disgruntled (and rightly so) sellers are lobbying their representatives in the Senate and Congress and change is forthcoming.
"Ebay is failing. It is like a 'buy now' aisle at the convenient store." There are also other online payment brokers.
"Greed and avarice, fraud and misrepresentation will take them both down. It is about time. They are the Acorn of the internet!"
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