The Stock of Ebay Slips as the Company's Earnings Outlook Falls Short

After posting an earnings beat, eBay Inc. experienced a decline in its shares during the extended trading session on Wednesday. The company's outlook for the current quarter failed to meet Wall Street's consensus, leading to a 4.6% drop in the stock price after hours, following a 1% increase in the regular session, closing at $48.80.

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Based in San Jose, California, eBay projected third-quarter adjusted earnings in the range of 96 cents to $1.01 per share, with revenue expected to fall between $2.46 billion and $2.52 billion. However, analysts had anticipated higher earnings of $1.02 per share on revenue of $2.47 billion.

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On the positive side, eBay reported second-quarter net income of $171 million, equal to 32 cents per share. This was a significant improvement compared to the year-ago period, which had seen a loss of $531 million, or 95 cents per share. When excluding stock-based compensation expenses and other items, the adjusted earnings for the second quarter were $1.03 per share, slightly higher than the year-ago period's 99 cents per share.

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In terms of revenue, eBay saw a rise from $2.42 billion in the year-ago period to $2.54 billion in the second quarter. Analysts surveyed by FactSet had projected earnings of 99 cents per share on revenue of $2.51 billion, showing that eBay managed to outperform revenue expectations.

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Despite the positive earnings report, the cautious outlook for the third quarter led to the after-hours decline in eBay's stock price, as investors had higher expectations.

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