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eBay hits its marks as transformation process continues

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Shares in eBay Inc () are expected to have slightly more sellers than buyers when trading begins later today, after a mixed set of second-quarter results as it continued to streamline the business and tweak its tech in the face of powerful competition.

During the quarter, the online marketplace group completed the sale of the eBay Classifieds business (giving up brands ranging from Gumtree to Shpock) to Adevinta for US$13.3bn in cash and shares, and also found a buyer for the eBay Korea business for a price of US$3bn.

READ: eBay and Adevinta to advance classifieds deal as Shpock, Gumtree and Motors.co.uk are put up for sale

Chief executive Jamie Iannone said the group had hit “several important milestones in our ongoing transformation” during the quarter, with the exit from Classifieds having “already delivered exceptional shareholder value”.

“We are simplifying our portfolio and growing our core while delivering significant shareholder value. We remain relentlessly focused on accelerating our product innovation by harnessing the power of next-gen technology and creating a more seamless experience for sellers.”

Facing competition from the increasingly popular Facebook Marketplace (which could soon become part of the mysterious Metaverse), not to mention old foes Craigslist and (), eBay still managed to grow revenue 14% to US$2.7bn in the second quarter of the year, driven by the change to a new payments system and growth in advertising from promoted products on its site.

Profits were down, however, with net income from continuing operations halving to US$294mln, or US$0.43 per diluted share. Underlying (non-GAAP) EPS came in at US$0.99.

This meant both revenues and EPS were in line with expectations for Wall Street analysts.

Operational changes during the quarter included the new payment management system, which is resulting in reducing unpaid items for sellers, while there were many tweaks to the technology and services offered by the site to get an edge over rivals.

This includes allowing customers to buy and sell non-fungible tokens (NFTs) on the platform, launching ‘Authenticity Guarantee’ for handbags and collectable sneakers/trainers costing over a certain amount; plus an escrow function for luxury watches over $10,000; a motorcycle parts finder introduced in the UK and Germany; product research to provide marketplace intelligence for sellers; and expanded shipping functions.

For the third quarter the company guided to revenue of $2.42-$2.47bn and diluted EPS of $0.64-$0.68, and underlying EPS of $0.86-$0.90.

The shares were down 1% to $67.43 in after-market trading overnight.



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