eBay Beats Earnings Estimates and Initiates Stock Dividend

January 30, 2019
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eBay, one of the world’s largest ecommerce companies, has reported on its earnings for the holiday quarter and there’s good news for investors. The company has managed to completely reverse its Q4 earnings loss from a year ago and has advised that it will initiate dividend payments in the coming weeks.

Here’s everything that investors need to know about the earnings call.

Turnaround from Last Year’s Loss

eBay is one of the largest companies to release its earnings data so far this season. The company reported that fourth quarter net income was $763 million, equating to $0.80 per share. A year ago, for the same quarter, the company lost $2.6 billion. The huge turnaround was made possible through operational changes, and changes to corporate taxes which mean that eBay can now keep more of the money that it earns.

Total revenue for Q4 2018 was reported to be $2.88 billion, an increase over the $2.71 billion from a year ago, and a slight bump over the analyst consensus expectation of $2.86 billion.

The company also confirmed on its earnings call that it will initiate shareholder dividend payments at $0.14 per share. Payments for eligible shareholders will be made close to March 20.

The revenue turnaround has given eBay some confidence in its position, and the company also announced that it would buy back up to $5 billion of stock throughout 2019.

eBay News Comes as Relief After Disappointing 2018

The earnings call led to a 0.03% increase for eBay during after hours trading. The stock was down -0.97% in the regular session.

Investors could take the earnings beat as a good sign of things to come. The company has said that it will now be focusing on improving services for its customers, to attract higher revenue.

In the last year, the stock has declined -16.98%, but has performed well since the opening of the market in 2019, climbing 20.02% year to date.

eBay remains an interesting long-term investment for portfolio builders. It’s still relatively affordable, it is backed by a solid business model, and ecommerce has never been stronger. However, wary investors will likely want to wait for more data and continued performance in Q1 before changing their position on the stock.

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