eBay shares are gaining ground in late trading Tuesday after the online marketplace company posted fourth-quarter results that edged both guidance and Street estimates.
The company also announced a new $2 billion stock repurchase authorization, boosting the total size of the current program to $3.4 billion. And it lifted its quarterly dividend rate by 8% to 27 cents a share, from 25 cents.
CEO Jamie Iannone said in an interview with Barron's that the company expects free cash flow this year of close to $2 billion -- and that the company is targeting $2 billion in stock repurchases for the year.
eBay in late trading is 3.6% higher at $46.
Iannone notes that eBay met or exceeded expectations by every measure in the quarter, as the company continued to find success with "focus categories" like sneakers, jewelry and auto parts. He also noted that eBay has rolled out new AI software to sellers, including the ability to simply take a picture of an object to automatically generate a description for a sales listing.
For the quarter, eBay posted revenue of $2.6 billion, up 2%, and ahead of both the company's forecast of $2.47 billion to $2.53 billion and Street consensus as tracked by FactSet at $2.5 billion. Gross merchandise value, or GMV, was $18.6 billion, also up 2%, and above the Street forecast of $18.1 billion.
On an adjusted basis, the company earned $1.07 a share in the quarter, above both the guidance range of $1 to $1.05 a share and Street consensus at $1.03. Under generally accepted accounting principles, the company earned $1.40 a share.
For all of 2023, eBay reported revenue of $10.1 billion, up 3%, with GMV of $18.6 billion, or 2%. Full year non-GAAP profits were $4.24 a share.
For the March quarter, the company projects revenue of $2.5 billion to $2.54 billion in revenue, up 0% to 2%; that is about in line with the Street consensus at $2.5 billion. The company sees adjusted profits for the quarter of $1.19 to $1.23 a share
The company sees gross merchandise value growth turning positive on a currency neutral basis in the third or fourth quarter. The company expects revenue growth for the year to be two points above GMV growth adjusted for currency. eBay expects non-GAAP operating margin to expand this year by 0.6 to 1.0 percentage points, with non-GAAP EPS growth of between 8% and 10%. That implies about $4.62 a share, which is above consensus at $4.46 a share.
In January, the company announced a restructuring plan that included a reduction in its workforce by 1,000 jobs, or about 9% of its staff, as well as reduction in the number of contractors deployed. "While we are making progress against our strategy, our overall head count and expenses have outpaced the growth of our business," the company said at the time.
Write to Eric J. Savitz at eric.savitz@barrons.com
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February 27, 2024 17:39 ET (22:39 GMT)
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