Shares in eBay Inc (NASDAQ:EBAY) plunged in premarket trading on Thursday after the ecommerce giant's fourth quarter forecasts disappointed analysts.
Ahead of the pivotal holiday shopping season, where it faces up against Amazon.com Inc. (NASDAQ:AMZN) and Walmart Inc (NYSE:WMT), eBay management also set out a three-year plan following a review of the group's assets.
Net revenues in the third quarter were US$2.6bn, flat year-on-year and US$50mln higher than analyst expectations.
Looking to the key final quarter to 31 December, net revenue is expected to come in at US$2.77bn-US$2.82bn, with earnings per share ranging from US$0.73 to US$0.76, as reported in the quarterly results published after market close on Wednesday. Analysts on average had expected a Q4 profit of US$0.76 on revenue of US$2.85bn, according to Refinitiv.
“We also made progress on our portfolio review and completed a thorough operating review that has resulted in a three-year plan to drive margin improvement while enabling reinvestment in critical customer initiatives,” said Scott Schenkel, interim chief executive.
The board expects to share an update on ticketing service StubHub before the next earnings report, as it continues reviewing the advertisement service Classifieds.
The two units have been at the centre of pressure from activist investment groups Elliott Management Corp and Starboard Value, who have been asking to sell them off, resulting in chief executive Devin Wenig handing in his resignation in September.
“We performed in line with expectations in Q3 while improving the Marketplace experience, creating better customer outcomes, and maintaining momentum in advertising and payments,” said Schenkel.
The stock dropped 8% to US$36.07 in pre-market trading on Thursday.