EBay Slips To Loss On Tax Charge

(RTTNews) - E-commerce giant eBay Inc. (EBAY) said Tuesday after the markets closed that it swung to big first quarter loss, hurt by a hefty tax charge taken for repatriating foreign earnings.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. At the same time, the company gave a weak forecast for the current quarter.

"We delivered a strong first quarter, with enabled commerce volume up 24 percent and revenue up 14 percent," said eBay Inc. President and CEO John Donahoe. "Today, we also announced a non-cash tax charge to facilitate repatriation of $6.0 billion net in foreign earnings, increasing our available U.S. cash and enhancing our financial flexibility."

eBay shares are currently losing 4.02% in after hours trading after closing the day's regular trading session at $54.54, up 90 cents or 1.68%. The shares trade in a 52-week range of $48.06 to $59.70.

First quarter net revenues from the company's Marketplaces business, which consists of eBay, Shopping.com, StubHub, eBay Classifieds and other e-commerce sites, rose 10% to $2.2 billion.

Gross merchandise volume in the first quarter increased 12% year over year to $20.5 billion.

Marketplaces gained 4.7 million new buyers to end the quarter with 145 million active buyers, up 14% from a year earlier.

Revenue from the company's PayPal business increased 19% to $1.8 billion in the first quarter. PayPal gained 5.8 million new active registered accounts in the period and ended the quarter with 148 million, a 16% increase over last year. PayPal's net total payment volume, or TPV, jumped 27% to $52 billion in the first quarter.

Last month, eBay completed its $800 million acquisition of Braintree, a global payment platform powering the next generation of online and mobile-first startups.

For the first quarter ended March 31, 2014, eBay reported a net loss of $2.3 billion or $1.82 per share, compared to net income of $677 million or $0.51 per share for the year-ago quarter.

The latest quarter results include a discrete tax charge of about $3.0 billion taken on $9.0 billion of foreign earnings from the prior years that were previously not subject to U.S. tax.

Excluding items, adjusted net income for the first quarter was $899 million or $0.70 per share, compared to $829 million or $0.63 per share in the prior year quarter.

On average, 38 analysts polled by Thomson Reuters expected the company to earn $0.67 per share for the first quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter narrowed to 20.6% from 21.3% a year ago, while adjusted operating margin shrank to 26.9% from 27.4% last year.

Net revenues for the first quarter rose 14% to $4.26 billion from $3.75 billion in the same quarter last year. Thirty-five analysts had a consensus revenue estimate of $4.23 billion for the first quarter.

The company repurchased 33.1 million shares of its common stock for about $1.8 billion during the first quarterand ended the quarter with $3.8 billion share repurchase authorization remaining.

Looking forward to the second quarter, the company forecasts revenues $4.325 billion to $4.425 billion, earnings of $0.51 to $0.53 per share and adjusted earnings of $0.67 to $0.69 per share. Analysts currently expect the company to earn $0.70 per share on revenue of $4.40 billion for the second quarter.

For the full year 2014, the company continues to forecasts revenues of $18.00 billion to $18,.50 billion and adjusted earnings of $2.95 to $3.00 per share. The company now expects net earnings of $0.04 to $0.09 per share, compared to its prior forecast of $2.40 to $2.45 per share.

Analysts currently expect the company to earn $2.99 per share on revenue of $18.26 billion for the full year 2014.

Earlier this month, eBay reached an agreement with activist investor Carl Icahn, ending their proxy fight ahead of the company's annual meeting of stockholders in May. Icahn has agreed to withdraw his proposal for the company to spin off payment processor PayPal and also withdraw his two nominees to the company's board of directors. Agreeing to Icahn's suggestion, eBay will add former CEO of telecommunications giant AT&T (T), David Dorman, as independent director to its board.