Ready your bids, tech investors: eBay (NASDAQ:EBAY) is set to announce first-quarter 2019 results next Tuesday, April 23, after the market closes. With shares of the online marketplace up around 25% so far this year, now's the time to touch base and see exactly what we can expect when its next report hits the wires.
For perspective, eBay's last quarterly update in late January offered plenty of material for investors to digest, from a freshly initiated $0.14-per-share dividend to a $4 billion increase in the company's current stock-repurchase authorization, which will bring planned capital returns to $7 billion over the next two years.
On eBay's headline numbers
Those generous capital-returns initiatives helped offset any qualms the market might have had about eBay's seemingly light revenue guidance last quarter.
For perspective, management's current outlook calls for first-quarter revenue between $2.55 billion and $2.60 billion -- the high end of which was around $60 million below consensus estimates at the time -- which should translate to adjusted (non-GAAP) earnings of $0.62 to $0.64 per share.
On new strategic initiatives, appeasing activists
Management, for its part, explained that the company will focus this year on driving improvements to the eBay user experience, and on investing to seize longer-term growth opportunities in the advertising and payments spaces. Listen closely during this quarter's call for specific color on eBay's progress toward those ends.
Early last month -- with input from multiple outspoken activist investors -- eBay also announced a number of new strategic performance initiatives. These include an operational review to accelerate revenue and operating income growth, and a strategic review of its noncore StubHub and eBay Classifieds businesses.
EBay further announced it will add two new board members: Elliott Management's Jesse Cohn, and Marvell Technology Group's CEO Matt Murphy. And perhaps unsurprisingly to stave off future proxy battles, it struck a "cooperation agreement" with affiliates of both Elliott Management and Starboard Value, through which each activist investor firm has agreed to certain standstill and voting provisions.
EBay CEO Devin Wenig explained in a press release:
Over the course of the last two months, we've met with a number of shareholders to understand their views. The bottom line is that we all share common ground: we see tremendous opportunity ahead and want to see eBay's full potential realized over the long-term. The initiatives we are announcing today are the result of this constructive dialogue.
Depending on the early impact of those initiatives, and any consequential deviance from eBay's performance relative to its Q1 guidance, shareholders should also keep an eye on any adjustments to the company's full-year targets. As it stands, the company most recently anticipated 2019 revenue to be between $10.7 billion and $10.9 billion (assuming modest organic growth of 1% to 3%), and adjusted earnings per share to be $2.62 to $2.68.
Shortly after eBay's release next week, I'll follow up with more discussion of its accomplishments over the past few months.