Ebay Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Ebay (NASDAQ:EBAY) will unveil its latest earnings tomorrow, Wednesday, January 16, 2013. eBay is an Internet company that, together with its subsidiaries, provides online marketplaces for the sale of goods and services. It also provides other online commerce platforms, online payment solutions, and communication offerings to a diverse community of individuals and businesses.

Ebay Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 61 cents per share, a rise of 10.9% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 60 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 61 cents during the last month. Analysts are projecting profit to rise by 16.5% versus last year to $2.05.

Past Earnings Performance: Last quarter, the company reported net income of 49 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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A Look Back: In the third quarter, profit rose 21.7% to $597 million (45 cents a share) from $490.5 million (37 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 14.8% to $3.4 billion from $2.97 billion.

Here’s how Ebay traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

EBAY

Wall St. Revenue Expectations: Analysts predict a rise of 17.5% in revenue from the year-earlier quarter to $3.97 billion.

Stock Price Performance: Between October 15, 2012 and January 10, 2013, the stock price rose $5.60 (11.8%), from $47.40 to $53. The stock price saw one of its best stretches over the last year between November 14, 2012 and November 26, 2012, when shares rose for eight straight days, increasing 10.6% (+$4.93) over that span. It saw one of its worst periods between May 10, 2012 and May 18, 2012 when shares fell for seven straight days, dropping 6.9% (-$2.85) over that span.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 25.5% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 19.8% in the first quarter and more than twofold in the second quarter before increasing again in the third quarter.

Analyst Ratings: There are 18 out of 26 analysts surveyed (69.2%) rating Ebay a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.47 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 1.95 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 31.1% to $17.41 billion while liabilities rose by 3.8% to $7.06 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)