Ebay earnings beat on surge in online shopping

E-commerce firm eBay said it would emerge “stronger” from the Covid-19 crisis after a pandemic-driven surge in online shopping helped the company beat estimates for sales and profit in the Christmas quarter.

Shares of the company were up nearly 10% in extended trade on Wall Street last night. 

The global health crisis has forced millions of Americans to stay indoors, leading to a jump in online orders for e-commerce companies including eBay, Amazon.com and Walmart’s  online business. 

“We’ll be stronger coming out of the pandemic than we were going in,” eBay’s chief executive Jamie Iannone said in an interview with Reuters. 

The company was benefiting from its updated strategy, Iannone said, which includes drawing shoppers through fashion offerings including runners and watches, enabling easier payments and improving its mobile app. 

EBay, a marketplace known for unique or hard-to-find inventory, is not focused on copying larger e-commerce rivals, he added. 

“Our buyers were very active during the holiday season,” Iannone said on a conference call with analysts.

“In the United States, one in 10 online shoppers bought something on eBay. In Germany, that number was one in seven and in the UK, it was one in four,” he added.

EBay also projected first-quarter revenue in the range of $2.94 billion to $2.99 billion, above estimates of $2.53 billion, according to IBES data from Refinitiv. 

“EBay is increasingly proving that it has the ability to sustain the gains it is seeing from Covid. We expect these trends to increasingly become ingrained in consumer behavior, providing support in 2021,” Wedbush analyst Ygal Arounian said.

Annual active buyers grew by 7%, to a total of 185 million global active buyers, while refurbished gifts emerged as a top trend for the holiday shoppers, the company said. 

Revenue in the fourth quarter, ended December 31, rose to $2.87 billion from $2.24 billion, beating analysts’ average estimate of $2.70 billion. 

Excluding items, eBay earned 86 cents per share, above estimates of 83 cents per share.