Shares of American multinational e-commerce company eBay was down as much as 11 percent in extended trading on Wednesday following its fourth-quarter earnings results and guidance for the first quarter of 2022 that fell short of expectations.
eBay reported earnings per share of $1.05 surpassing analysts’ expectations of 99 cents, according to analysts at Refinitiv. Revenue for the fourth quarter was $2.61 billion, exactly what analysts had envisioned for the fourth quarter.
The company also issued guidance for the first quarter of 2022. It expects revenue to be in the range of $2.43 billion and $2.48 billion. This represents a decline of 7 percent to 5 percent YoY. Per FactSet, analysts expect revenue for the first quarter of 2022 to come in at $2.61 billion. eBay also expects between $1.01 to $1.05 in adjusted earnings per share. This also falls short of analysts’ forecast of $1.08 per share, according to FactSet.
Although its fourth-quarter earnings were not bad, the company’s disappointing guidance for the first quarter sent its stock falling. Its shares suffered a drop of more than 11 percent.
In the fourth quarter, the company’s active buyers suffered a 9 percent decline to 147 million. Analysts, per FactSet, had expected the figure to stand at 156 million active buyers in the quarter. Annual active sellers also suffered a decline of 8 percent to 17 million.
The company’s fourth-quarter result comes amid battles with declining online demand, increasing competition and global supply chain disruptions. Let’s not forget the effects of the Coronavirus pandemic too. Thanks to vaccines, people are already returning to physical locations for their shopping needs and this affects the demand for shopping via online platforms.
According to eBay, a huge part of revenue comes from advertising on its platform. The figure hit a milestone of $1 billion last year.
Apart from eBay, e-commerce giant Amazon also issued weak guidance for the first quarter of 2022.