EBay Sales Growth, Holiday Advertising in Focus -- Earnings Preview

By Laura Stevens Features Dow Jones Newswires

EBay Inc. is scheduled to announce its third-quarter earnings after the market closes on Wednesday. Here's what you need to know:

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EARNINGS FORECAST: Analysts polled by Thomson Reuters expect eBay to earn 48 cents per share, compared with adjusted results of 45 cents a year ago. (The company earned 36 cents per share unadjusted.) The company forecast adjusted third-quarter earnings of between 46 cents and 48 cents.

REVENUE FORECAST: Revenue of $2.37 billion is forecast by the analysts, compared with $2.22 billion a year ago. EBay expected revenue of between $2.35 billion and $2.39 billion.

WHAT TO WATCH:

-- SALES GROWTH: Analysts expect another quarter of growth in gross merchandise volume, a sign of health as the company continues to improve its website design and search results and banks on better traffic thanks to its new advertising campaign. The company has also added price-match and three-day delivery guarantees. App usage growth increased in the quarter, say Aegis Capital Corp. analysts, signaling "GMV growth is likely to meet or exceed our expectations."

-- HOLIDAYS: EBay has been cranking up its advertising campaigns lately, a trend likely to continue through the holidays. Analysts think it's paying off. Expect executives to shed some light on their strategy for the all-important season, including potential promotions to attract increasingly last-minute online shoppers to the site. Cowen analysts are looking for "color around the effectiveness of the new brand marketing campaigns, which began in the U.S. at the end of 2Q17 and expanded internationally during Q3."

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-- AMAZON ALTERNATIVE?: Chief Executive Devin Wenig has promised an update on how brands are deciding to sell on the site, and it could come on Wednesday's call. It's "seeing a step-up in conversations with, and activity by, established brands looking to set-up stores and sell on eBay," write Citi analysts. It could prove an Amazon alternative for some.

Write to Laura Stevens at laura.stevens@wsj.com

(END) Dow Jones Newswires

October 18, 2017 05:44 ET (09:44 GMT)