Sunday, July 13, 2008

eBay Q2 Earnings Call is Weds. 7-16

The sense on the street is that eBay will meet or beat their numbers, which should be no surprise, that has happened every quarter that I can remember -- eBay knows how to make their numbers.

The concern for investors should be centered around the Marketplace business and if the recent changes are having the desired effect. It is great for PayPal and Skype to be growing very fast, because their growth helps the overall business and limits the financial damage coming from the Marketplace business, but if eBay can't stop the bleeding in the US business, management is going to have a tough time.

Some things to look for during the conference call:
  • What are the active user numbers? Are they growing again?
  • Is GMV growth still in single digits?
  • Is International GMV taking more share of total GMV?
  • Did the Buy.com deal grow GMV in their categories or just take it from other sellers at a lower take-rate?
  • How much of PayPal's revenue is coming from outside of eBay.
  • What happens if Amazon actually launches a true competitor to PayPal?

It will certainly be an interesting conference call, as it will be the first where John Donahoe was fully in charge. I have no doubt they will meet their numbers; CFO Bob Swan is that good. Do they have the right strategies and right people in place to turn around the flagship eBay business?

During the Q4 2006 earnings call, Meg said;

"Responding to a changing competitive landscape is part of this company's DNA, and I believe we have a great set of assets, the right strategies and the right people in place to maintain our sizable lead in all of our business units. Even with these challenges, we still delivered strong results for the full year and are extremely well positioned for continued success into 2007." (bold is mine)

Obviously they didn't have the right strategies and right people in place, because in January of 2008 they created new strategies and put different people in place. So what will John Donahoe say this Wednesday that I can quote him on 2 years from now?

Just my 12%

3 comments:

ms.pat said...

I'll make it short and sweet. I don't believe their numbers just as I don't believe their ebay-speak.

www.ACEOart.net

Henrietta said...

We have to remember that 'eBay the auction site' is a very small part financially of 'eBay International' the whole.

Naturally the figures overall even in Marketplaces which includes StubHub and all that advertising, will meet and exceed forecasts. That is all the stock market analysts care about.

As eBay IS the majority stockholder it is not as though they will have problems there. The further share price declines, the more shares eBay can purchase and the more they can do as they want.

Poly said...

"eBay the auction site' is a very small part financially of 'eBay International' the whole"

Are you kidding me! The auction business is well over 60% of the business. The US auction business is over 30%.

"eBay IS the majority stockholder"
What are you talking about? The founder? who own less than 15%, the company itself obviously can't own it's own stock. Shares bought back are simply retired, decreasing the outstanding shares