Online e-commerce site Ebay posted an increase in the price of its stocks on NASDAQ in end-of-the-week trading, reported livemint.com. The onlince sales firm also booked higher-than-expected profits for 2015 in Q3.
Ebay (NASDAQ:EBAY) was projected to decline in profits in 2015 after selling its subsidiary, global payment gateaway PayPal. The online sales site and rival to Amazon.com pushed up its forecast for the year, easing investor woes about a drop in a sales following the PayPal spinoff.
Due to dwindling retail sales emanating from an economc downturn since the 2008 recession, retailers like Wal-Mart Stores Inc. are capitalizing their presence online.
In mid-week trading, EBay stocks were on an incline moving up as much as 7.9% after the closing bell on Wednesday.
Despite the positive momentum, Ebay has stiff competition from Amazon.com Inc. among other online stores that have created a buzz in online product sales recently. Walmart Stores is a retailer that has taken to online selling betting on its reputation for discounted sales for the average American.
PayPal, a highly profitable digital payment firm, declared itself independent, becoming a separate entity on 18 July. Since then analysts warn Ebay may not make it on its own and profits for 2015 have been declining.
“The worst case scenario kind of came off the table,” Steve Weinstein, ITG Investment Research senior Internet and e-commerce analyst said in a Reuters report. “I think the Street was preparing for something really bad.”
"Instead, the company raised its forecast for adjusted profit from continuing operations for the full year to $1.80-1.82 per share from $1.72-1.77. Analysts on average were expecting a profit of $1.78 per share," reported Thomson Reuters.
According to Ebay, the spike in earnings come from better performance in the second quarter and higher share prices along with a more favourable tax rate.
Ebay's CEO commented on its plans to boost profits for 2015 in a statement:
The shopping company's "plans include a business without the PayPal operations, which were split off from eBay in July. EBay has shed other assets, including its stake in CraigsList and its enterprise unit, said eBay Chief Executive Officer Devin Wenig in a report by SiliconBeat. "The company also closed its one-hour delivery service."
In year-ago figures, EBay ended the third quarter last year at net income fell to $539 million, the equivalent of 45 cents per share, in the two-third quarter ending on Septembee 30. This
This compares to $673 million, or 54 cents per share, in comparison to earnings in 2014.
