eBay Earnings Review: What Wall Street's Saying

NEW YORK (TheStreet) -- Shares of eBay (EBAY) plunged 5.1% to $50.80 following weak guidance, amid uncertainty in the U.S. for the upcoming holiday season.

For the fourth quarter, eBay said it expects a cautious environment, which was reflected in its guidance. The company expects to earn between 79 cents and 81 cents a share, with sales between $4.5 billion and $4.6 billion. Analysts expect eBay to earn 83 cents a share on $4.64 billion in revenue.

Though guidance for the fourth quarter was cautious, the third quarter was aided by continued strength in PayPal, the mobile payments giant.

PayPal saw a healthy 19% increase in revenue to $1.6 billion during the quarter. The payments platform ended the quarter with 137 million accounts, up 5 million sequentially, and 17% year over year. Net total payment volume grew 25% to $44 billion.

The San Jose, Calif.-based Internet giant reported third-quarter earnings of 64 cents a share on $3.89 billion in revenue. Analysts polled by Thomson Reuters were looking for the company to earn 63 cents a share on $3.9 billion in sales.

Following the report, several Wall Street analysts were cautious on the U.S. holiday season, as it pertains to eBay, but remained optimistic overall.

Deutsche Bank analyst Ross Sandler (Hold, $56 PT)

"Tgt USD59 to USD56. eBay reported 3Q revenue slightly below and EPS $0.01 above consensus estimates, and reduced 4Q expectations. Importantly, eBay noted incremental weakness in the US e-commerce space, consistent with comscore desktop data, despite accelerating 2-year growth. The commentary is likely to weigh on the Internet sector, but we continue to believe that eBay is losing modest market share to others, including Google (PLA) and Amazon. The company's overall fundamentals largely remain intact, but at 22x 2014 GAAP EPS and the mid-teens EPS growth, we see little multiple expansion and believe shares should remain range-bound."

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