Bland, blind, and blundering, eBay (NASDAQ:EBAY) isn't making a whole lot of friends these days.
The fading dot-com legend posted uninspiring fourth-quarter results last night. Revenue fell by 7%, as double-digit top-line gains at PayPal and Skype weren't enough to offset a 16% decline for its flagship marketplace business. Oh, and that's with the company's marketplace business assisted by a 41% uptick in unique visitor counts to its online classified sites. Take that out of the mix, and eBay.com itself begins to look even uglier.
It's sad, really. This is the rare album where the self-titled track is the worst one on the record.
Margins deteriorated on the way down, with net income doubling the 7% revenue slide. The rare silver lining here is that non-GAAP earnings of $0.41 a share, despite clocking in far short of last year's profit, were actually better than Wall Street was expecting.
Oh, things will get hairier in the near term. The company expects to post an adjusted profit of $0.32 a share to $0.34 a share on $1.8 billion to $2.05 billion in revenue during the current quarter. Analyst estimates peg net income of $0.40 a share on $2.1 billion in revenue.
Remember when eBay used to provide guidance for the entire year? It's turning off its high beams now, preferring to crawl along through the fog just three months at a time.
Value-sniffing investors may decide to waltz in after the rubble settles. I'll admit that it's hard to resist eBay with a trailing P/E multiple in the single digits. However, the fourth quarter was eBay's first dip in year-over-year profitability, and that slide will get even worse in the current period.
As Amazon.com (NASDAQ:AMZN) was scoring its best holiday ever, eBay is licking its wounds and blaming a strengthening dollar for part of its downfall. As burned "power sellers" discover that they can use search engines like Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) to establish direct relationships with potential clients on the cheap, eBay insists that its policy changes haven't been detrimental.
As eBay points to "the slow-down of the e-commerce market globally" for its site's globetrotting woes, South Korea's Gmarket (NASDAQ:GMKT) and Latin America's MercadoLibre (NASDAQ:MELI) continue to grow.
We're getting to the point where eBay.com is the albatross holding the company back, and it won't be long before growth-starved investors beg eBay to spin off PayPal and Skype so they can ride the verbs that are still worth boarding.
More items in the bid basket:
- The company's auction site was soft three months ago, too.
- Things just haven't been the same since Meg Whitman went away.
- It's So Much Worse Than You Think
