EBay expected to report 2nd-quarter growth, but results may be crimped by euroBy AP
Wednesday, July 21, 2010
Ahead of the Bell: EBay to report 2Q results
SAN FRANCISCO — EBay Inc. should post another quarter of growth with second quarter earnings Wednesday, but analysts warned that the company’s forecast may be crimped by a weak euro.
Growth typically comes from eBay’s two main businesses: its online auction and e-commerce Web sites and online payments business PayPal. Analysts polled by Thomson Reuters expect eBay to report adjusted earnings of 39 cents per share on $2.17 billion in revenue.
In the year-ago quarter, eBay earned 25 cents per share, or 37 cents per share when excluding one-time items, on $2.10 billion in revenue.
“The underlying trends should show robust PayPal growth and progress on the marketplace turnaround,” Jefferies & Co. analyst Youssef H. Squali said in a note to clients this week. He has a “Buy” rating on eBay’s stock.
He added, however, that a weak euro could trim about $60 million off of the company’s revenue in the July-September quarter, plus a penny per share off earnings.
Janney Capital Markets analyst Shawn Milne also predicted “a negative impact” from foreign exchange rates.
In a recent client note, BGC Financial analyst Colin Gillis predicted that, as in the first quarter, eBay will report strong growth from PayPal. However, he also expects that eBay’s ongoing strategy shift — from getting revenue when people list it items on its main site to bringing in revenue when items actually sell — will hurt the company for several quarters.
Tags: Computing And Information Technology, Internet Technology, North America, San Francisco, United States