EBay drops on economic 'headwinds' in Europe, South Korea

EBay reported solid second-quarter results on Wednesday but Chief Executive John Donahoe warned of economic “headwinds” in the second half of the year from Europe and South Korea.

Chief Financial Officer Bob Swan told analysts that eBay’s full-year results will come in at the low end of the company’s forecast range, helping to send shares of the e-commerce giant down more than 5 per cent in after-hours trading.

“It’s not a quarter in which they absolutely crushed it,” said Ron Josey, an analyst at JMP Securities. “They are doing well, but people were hoping for more.”

Second-quarter net income was US$822 million (HK$6.4 billion), or 63 cents a share, versus US$730 million, or 56 cents a share, in the same period a year earlier. Revenue rose 14 per cent to US$3.88 billion. EBay was expected to earn 63 cents a share on revenue of US$3.89 billion, according to Thomson Reuters I/B/E/S.

“Macroeconomic headwinds in Europe and Korea will continue to be a challenge in the second half of the year,” Donahoe said. “But our core businesses are strong.”