EBay Inc. gave revenue and profit forecasts for the current period that topped analysts’ estimates, suggesting the company is gaining new customers amid an e-commerce boom. Shares jumped about 10% in extended trading.
Sales will be $2.94 billion to $2.99 billion in the first quarter, the San Jose, California-based company said Wednesday in a statement. Earnings, excluding some items, will be $1.03 to $1.08 a share. Analysts estimated profit of 85 cents a share on sales of $2.54 billion.
Pandemic-wary shoppers have turned to online marketplaces like EBay and Amazon.com Inc. to avoid stores in the era of social distancing. EBay said it ended the quarter with 185 million active buyers, an increase of 7%.
“EBay is proving that it has the ability to sustain the gains it is seeing from Covid,” said Ygal Arounian, an analyst at Wedbush Securities. “We expect these trends to increasingly become ingrained in consumer behavior, which will support EBay in 2021.”
The e-commerce company has been divesting pieces under pressure from activist investors. Last year, it sold event-tickets marketplace StubHub to Viagogo for $4.05 billion and its classifieds business to Norway’s Adevinta ASA in a cash-and-stock deal worth $9.2 billion that leaves EBay with a 44.4% stake in the company. It is exploring the sale of the company’s online marketplace in Korea where EBay gets more than 10% of its revenue.
Chief Executive Officer Jamie Iannone, who took the helm in April, is still trying to show that a slimmed-down EBay can lure customers and get them to spend more on the site.
Revenue jumped 28% to $2.89 billion in the period ended Dec. 31, beating analysts’ average projection of $2.7 billion. Profit, excluding some items, was 86 cents a share, compared with the average estimate of 82 cents, according to data compiled by Bloomberg.
Gross merchandise volume, the value of all goods sold on the site, rose 21% in the holiday quarter to 26.6 billion, down from a 22% year-over-year increase in the third quarter.
Shares rose to a high of $64.86 in extended trading after closing at $58.04. the stock has increased almost 70% in the past 12 months.