Why eBay Inc (NASDAQ: EBAY) stock is under pressure

Free $100 Forex No-Deposit Bonus

eBay Inc (NASDAQ: EBAY) stock fell over 3.2% on April 30th, 2020 pre-market session (as of 8:32 am GMT-4; Source: Google finance) post the first quarter of FY 20. In the first quarter, the volume was flat compared to a year ago, which reflects a 4 point improvement compared to Q4 with U.S. volume 5 points better and international volume 4 points better. Organic revenue has grown by 2% during the period, which was above the high-end of the company’s guidance. Margins were strong at 31.5% due to operational cost savings that helped fund managed payments as well as incremental investments and expenses related to COVID-19. The company is on track to realizing an incremental $2 billion in revenue and $0.5 billion of operating income in 2022. The company had generated $702 million of operating cash and $604 million of free cash flow, up 54%. The company has ended the quarter with $5.2 billion in cash and investments.

Meanwhile, the company in February had completed the sale of its event-tickets marketplace StubHub to Viagogo for US$4.05 billion and is exploring options for the classifieds business. This is subject to working capital adjustments and net proceeds of $3.2 billion. In Q1, the company had returned $4.1 billion to shareholders through share repurchases and cash dividends. The company is also trying to boost revenue from its advertising and payments businesses.

Moreover, the company has also taken two steps to further improve the liquidity position. The company has acquired $1 billion of debt at favorable rates that the company intends to use to repay our 2020 maturities that come due in June and October. The company has also renewed the $2 billion credit revolver to retain financial flexibility.

EBAY in the first quarter of FY 20 has reported the adjusted earnings per share of 77 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents, according to data compiled by Bloomberg. The company had reported 2 percent fall in the adjusted revenue to $2.4 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $2.34 billion. The company has delivered $1.9 billion of transaction revenue, which is up 3% and $474 million of marketing services and other revenue, which declined by 8%, inclusive of a 6 point headwind from the sale of brands4friends. The net impact of COVID-19 in the quarter was minimal overall with Marketplace volume driven upside offset by Classifieds downside.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.