EBay says quarterly profit will miss analyst estimates

SEATTLE— EBay Inc. projected earnings that may miss analysts’ estimates as growth on its marketplace stalled, revealing that shoppers went elsewhere during a holiday season that saw online spending reach new heights. Shares fell as much as 11 per cent in extended trading.

Profit, excluding certain items, will be 43 cents (U.S.) to 45 cents a share in the current quarter, eBay said Wednesday, compared with analysts’ estimates of 48 cents. Sales in the fourth quarter were $2.32 billion, unchanged from a year earlier, excluding PayPal Holdings Inc., which became a stand-alone company in July, eBay said.

EBay is struggling to remain relevant as Amazon.com Inc. gobbles up market share by offering speedy delivery and brick-and-mortar retailers ramp up their online shopping options.

“EBay has kind of lost its identity,” said Steven Weinstein, an analyst at ITG Inc. in San Francisco.

“Their pricing isn’t special. Their service isn’t special. They’ve lost their competitiveness.”

U.S. e-commerce sales grew 13.6 per cent to reach $106 billion last quarter, according to EMarketer. eBay’s merchandise value — the total value of goods sold on the marketplace — of $21.9 billion was unchanged in the quarter compared with 2-per-cent growth a year earlier.

The San Jose, Calif.-based company forecast annual earnings of $1.82 to $1.87 a share, essentially the same as 2015.

Chief executive officer Devin Wenig needs to entice shoppers and merchants back to eBay at a time when they have more alternatives for buying and selling goods online and consumers expect fast, free delivery offered by competitors such as Amazon.

The company reported its StubHub ticket exchange generated $232 million in the fourth quarter, a 33-percent increase from a year earlier.