eBay (NASDAQ: EBAY) shares dropped by ~ 5 percent after the company reported fourth-quarter 2019 earnings last week. The online marketplace actually reported better than expected earnings for the quarter.
However, the earnings forecast for the coming quarter disappointed analysts. The company forecasted earnings for the upcoming quarter to be 50 to 53 cents a share on sales of $2.55 to $2.60 billion. These projections didn’t go well with analysts who were projecting earnings of 71 cents a share on revenue of $2.64 billion.
In its earnings release, the company reported fourth-quarter revenue of $2.8 billion and a profit of 81 cents per share beating market expectations of 72 cents a share.
eBay sees a full-year 2020 revenue of between $10.72 billion and $10.92 billion with adjusted earnings per share of $2.95 to $3.05.
eBay faces strong headwinds from competitors including, and notably, Amazon.com. The company has been facing pressure from activist investors to improve profitability. Due to pressures from Elliott Management and Starboard Value, eBay had agreed to sell its ticketing unit, StubHub, for $4.05 billion to ticket re-seller Viagogo. The transaction should close by the end of the first quarter of 2020.
eBay faces a tough road ahead in its efforts to win back the confidence of investors on its ability to increase GMV and the growth of its payments and advertising businesses.