A Sneak Peek Into EBay’s Upcoming Earnings

S&P 500 (NYSE:SPY) component Ebay (NASDAQ:EBAY) will unveil its latest earnings on Wednesday, October 17, 2012. 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 analyst estimate is for profit of 46 cents per share, a rise of 9.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 47 cents. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. Analysts are projecting profit to rise by 15.3% versus last year to $2.03.

Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported net income of 52 cents per share against a mean estimate of profit of 48 cents, and the quarter before, the company exceeded forecasts by 5 cents with net income of 48 cents versus a mean estimate of profit of 43 cents.

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A Look Back: In the second quarter, profit rose more than twofold to $692 million (53 cents a share) from $283.4 million (22 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 23.1% to $3.4 billion from $2.76 billion.

Stock Price Performance: Between July 18, 2012 and October 11, 2012, the stock price rose $7.03 (17.4%), from $40.46 to $47.49. The stock price saw one of its best stretches over the last year between December 2, 2011 and December 9, 2011, when shares rose for six straight days, increasing 6.9% (+$2.04) 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.

Wall St. Revenue Expectations: On average, analysts predict $3.4 billion in revenue this quarter, a rise of 14.5% from the year-ago quarter. Analysts are forecasting total revenue of $14.02 billion for the year, a rise of 20.3% from last year’s revenue of $11.65 billion.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 29.8% 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 more than threefold in the fourth quarter of the last fiscal year and 19.8% in the first quarter before increasing again in the second quarter.

Analyst Ratings: There are 21 out of 30 analysts surveyed (70%) rating Ebay a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.95 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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

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