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eBay Earnings: What Wall Street's Saying

Stocks in this article: EBAY

NEW YORK ( TheStreet) -- Shares of eBay (EBAY) are down sharply this morning, off 6.4% to $53.69 in pre-market trading after the online auctioneer posted weak third-quarter guidance.

The San Jose-based Internet retailer said it expects third-quarter sales to fall in a range of $3.85 billion to $3.95 billion, a below consensus figure as analysts surveyed by Thomson Reuters were expecting $3.97 billion. Non-GAAP earnings per share are expected between 61 cents and 63 cents per share, once again below the estimate, this time for 65 cents.

Despite the third-quarter guidance miss, eBay reported second-quarter earnings in line with consensus. Non-GAAP earnings were 63 cents per share, a 13% year-over-year increase driven mainly by strong top-line growth. The company reported revenue for the second quarter of $3.877 billion, a 14% increase from the same quarter in 2012. Analysts surveyed by Thomas Reuters expected eBay to earn 63 cents per share on $3.892 billion in revenue.

With shares down sharply this morning, here are what some analysts on Wall Street are saying:

JPMorgan analyst Doug Anmuth wop rates the share Overweight, wrote that guidance was "somewhat disappointing. While U.S. GMV growth and Payment TPV were strong, and Marketplaces and PayPal user growth accelerated, continued macro pressures in Europe and Korea, and declining FX drove lower 2H13 expectations."

Cantor Fitzgerald analyst Youssef Squali who has a buy rating on the shares with a $62 12-month price target said that "2Q:13 was largely a repeat of 1Q:13, with in-line overall results and improving trends in the U.S., offset by sequential slowdown internationally. Even though a weaker international macro and FX remain a drag on the short-term outlook, accelerating growth in active users for both Marketplaces and PayPal point to strong engagement and strong underlying fundamentals. We're maintaining a BUY rating and adjusting our estimates and PT to $62 from $64."

Deutsche Bank analyst Ross Sandler, who rates the shares hold with a $59 price target write that "eBay reported in-line 2Q results, but modestly lowered full-year expectations on worsening macro in Korea and Europe, and unfavorable FX rates negatively impacting cross-border. The company's overall fundamentals largely remain intact and on a consistent trend-line, but EBAY shares are unlikely to see multiple expansion from 21x GAAP EPS as 2H forecasts still point to accelerating growth. We modestly trim our 2014 revenue and EBITDA, shares remain Hold rated; we view the risk/reward as balanced. Maintain Hold."

And UBS analyst Eric J. Sheridan, who also rates the shares a buy and has $64 price target said that "eBay reported Q2 '13 revenues of $3.88b, for growth of 14.1% YoY (vs. our est. of $3.87b & Street $3.89b). Management maintained full-year guidance but believes int'l macro headwinds will drive sales and EPS to the lower end of the range. No change to our long-term thesis - we remain bullish on eBay's strategic positioning for multichannel commerce. However, implied Q4 revenue guidance suggests acceleration, which many investors were already questioning before the Q2 earnings report. As a result, the stock could be range bound in the coming months."

-- Written by Chris Ciaccia in New York

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