EBay Declines as Turnaround Effort Falls Short

Last Updated on Thursday, 22 April 2010 02:00 Written by a2e Thursday, 22 April 2010 02:00

EBay Declines as Turnaround Effort Falls Short of Expectations

April 22 (Bloomberg) — EBay Inc. fell as much as 8.8 percent in late trading after its profit forecast missed estimates, a sign Chief Executive Officer John Donahoe is struggling to stem the loss of customers to Amazon.com Inc.

Second-quarter profit will be 37 cents to 39 cents a share, excluding one-time items, the San Jose, California-based company said yesterday in a statement. Analysts in a Bloomberg survey had estimated 40 cents on average.

Donahoe is trying to revive growth at EBay’s main e- commerce site after the recession and a drop in demand for online auctions crimped revenue. He has expanded inventory, beefed up fraud protection for buyers and steered the company away from auction sales. Investors expected a bigger payoff last quarter, especially after upbeat signals from retailers such as Best Buy Co., said Colin Gillis, an analyst at BGC Financial LP.

“We saw the strongest numbers from retailers we’ve seen in many months,” Gillis said. The New York-based analyst has a hold rating on EBay shares, which he doesn’t own. “Everyone thought we would have blowout numbers.”

EBay fell as much as $2.32 to $23.97 yesterday in extended trading. The shares, which had gained 12 percent this year, closed at $26.29 in regular Nasdaq Stock Market trading.

Revenue in the second quarter will be $2.15 billion to $2.2 billion, EBay said. Analysts had anticipated $2.21 bil …
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