(Reuters) — EBay Inc forecast lower-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar and stiff competition from Amazon.com Inc.

The company which is also being hit as brick-and-mortar retailers such as Wal-Mart Stores Inc boost their online presence, reported that its revenue was flat in the crucial holiday quarter.

EBay’s shares fell about 11 percent to $23.51 in extended trading on Wednesday.

The company forecast full-year adjusted profit of $1.82-$1.87 per share and revenue of $8.5 billion-$8.8 billion.

That was lower than analysts’ average expectation of $1.98 per share in profit and $8.99 billion in revenue, according to Thomson Reuters I/B/E/S.

“It appears eBay is guiding to a decline in profit in 2016, which is very concerning,” Gil Lurie, an analyst with Wedbush Securities, said.

EBay’s forecast for first-quarter adjusted profit of 43-45 cents per share and revenue of $2.05 billion-$2.10 billion also missed analysts’ average estimates.

The company’s revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier and in line with analysts’ average expectations.

While the number of active buyers on eBay’s platforms grew 5 percent, there was no growth in gross merchandise volume, or the total value of all goods sold on its sites.

Online sales in the United States jumped a better-than-expected 9 percent to $105 billion in the November-December holiday period, according to the National Retail Federation.

“While not a direct competitor in every respect, the growth of (Amazon’s) successful Prime service has locked more customers into using its services and sites in a way that is unhelpful to eBay,” said Carter Harrison, a retail analyst at research firm Conlumino.

San Jose, California-based eBay, which derives nearly 60 percent of its revenue from overseas, also faces headwinds from a strong dollar.

The average value of the dollar against a basket of currencies was 11.7 percent higher in the fourth quarter compared with the same quarter last year.

EBay’s revenue grew 5 percent on a forex-neutral basis in the quarter. On the same basis, gross merchandise volume also rose 5 percent.

The company’s net income fell to $477 million, or 39 cents per share, from $1.02 billion, or 82 cents per share.


VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
  • up-to-date information on the subjects of interest to you
  • our newsletters
  • gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
  • networking features, and more
Become a member