E-commerce might have been where the growth was this holiday season, but eBay Inc. missed out and saw a modest decline in fourth-quarter net revenues. And it’s not predicting big growth, if any, this year.
Shares of the company, which separated from its PayPal division last year, dropped 9.5 percent to $23.90 in after-hours trading.
Ebay’s sales for the fourth quarter, ended Dec. 31, totaled $2.3 billion, while total gross merchandise volume on the platform tallied $21.9 million.
That’s a huge chunk of market share that the company has taken ultimately from brick-and-mortar retailers, but eBay still faces stiff competition from the much larger Amazon, which on Thursday is expected to post net revenues of nearly $36 billion for the quarter, growth of 22.7 percent.
Ebay’s earnings from continuing operations dropped 28 percent to $523 million. Adjusted earnings fell to 50 centers a diluted share, from 55 cents a year earlier, and were in line with expectations. The company recorded more than 265 million transactions across 190 markets during the quarter.
“We delivered solid results as we continue to reposition our business amid the backdrop of the competitive holiday retail environment,” said Devin Wenig, eBay’s president and chief executive officer, on a conference call with analysts.
He said the company’s marketplaces platform will “continue to see an impact on traffic and new user acquisition along with continued near-term pressure from some of our strategic longer-term initiatives which curtailed growth in the quarter. Six months ago, we began a series of platform inventory and policy changes [that] we believe are critical to make our business more competitive over the long-term.”
In the full year, eBay’s revenues declined 2 percent to $8.59 billion as earnings from continuing operations decreased 6 percent to $2.23 billion. For this year, the company is looking for revenues of just $8.5 billion to $8.8 billion, opening up the possibility of a top-line decline.