LOS ANGELES (AP) — EBay said the growth rate of e-commerce in the U.S. is slowing as it delivered a weaker-than-expected profit and revenue outlook for the current quarter through December. The company's third-quarter earnings edged past analysts' expectations, but revenue rose just short of estimates.
Following the release of the financial results Wednesday, eBay Inc.'s stock fell 5.3 percent to $50.70 in after-hours trading.
The San Jose, Calif.-based online auctioneer, marketplace host and payments processor said U.S. e-commerce had been growing at an annual 15.5 to 16 percent pace, but it slowed to around 13 percent by the July-September quarter. That softening, plus a weaker U.S. dollar affecting its overseas transactions, led the company to say its annual profit and revenue would come in at the low end of its outlook.
EBay Inc. CEO John Donahoe suggested that the 16-day partial U.S. government shutdown was partly to blame, citing "uncertainty about the government."
"Those uncertainties, frankly, we can't control," he told analysts on a conference call.
In an interview, he said the government shutdown wasn't entirely at fault for the depressed consumer psyche since the deceleration started in July and August. He said he hopes a last-minute resolution ending the gridlock gets passed. "Hopefully that'll have a positive impact," he said.
EBay's forecast for the current quarter through December predicts adjusted earnings of 79 cents to 81 cents per share, below the 83 cents analysts were looking for. The company also said it expects quarterly revenue of $4.5 billion to $4.6 billion, while analysts were estimating revenue of $4.64 billion.
Its annual outlook for adjusted earnings between $2.70 and $2.75 per share and revenue of $16 billion to $16.5 billion was unchanged.
The muted fourth-quarter earnings outlook was partly the result of the company's plans to invest more in a free-shipping pilot that began this month with nine retailers including Levi's, Kenneth Cole and Aeropostale, Donahoe said. The company subsidizes the cost of shipping to a U.S. address if customers pay using PayPal, eBay's payment processing unit, and it is examining adding more retailers to the program.
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