EBay profit beats estimates; asset sales considered

eBay profit topped analysts’ estimates in the face of slowing sales growth, showing the company can extract more from its millions of loyal buyers and sellers even if it struggles to attract many new customers.

The company also bowed to pressure from activist investors, saying it is reviewing the role and value of its StubHub and Classifieds businesses ‘to determine the best path forward to maximize shareholder value.’

eBay shares rose about 5% in extended trading on Wednesday, after closing in New York at $39.03.

‘The idea that management is open to explore a sale of StubHub caught the market’s attention,’ said RJ Hottovy, an equity analyst at Morningstar. ‘They still have things to solve on with their online marketplace business.’

eBay Chief Executive Officer Devin Wenig has struggled to jump start growth since he took the helm in 2015 following a split with PayPal Holdings Inc. Activist investors Elliott Management Corp. and Starboard Value acquired eBay stakes, and in January Elliott proposed changes including the possible sale of tickets marketplace StubHub and the classified ads business.

eBay shares are up about 40% this year, more than double the benchmark S&P 500 Index. Wenig sees advertising and eBay’s new payments business as sources for revenue growth. Earlier this year, he rejected the idea of selling StubHub or other pieces of the company.

Revenue rose 1.8% to $2.69 billion in the second quarter, in line with analysts estimates. Earnings, excluding some costs, were 68 cents per share in the quarter. Analysts estimated 62 cents, according to data compiled by Bloomberg.

eBay raised its full-year profit forecast to a range of $2.70 to $2.75 per share. Wall Street expected $2.70 a share, on average.