EBay’s latest figures reveal a lacklustre performance over the golden quarter and signal weak results for its full-year trading.

The online marketplace underwhelmed many with its fourth-quarter results released last week.

EBay has developed services that make shopping convenient

ebay

EBay’s latest figures reveal a lacklustre performance over the golden quarter and signal weak results for its full-year trading

Sales reached $2.3bn (£1.6bn), a slight decline on the same quarter a year ago, while Gross Merchandise Volume (GMV) delivered minimal growth of 1% on a currency-neutral basis, declining 3% on a reported basis.

Net income for the fourth quarter from continuing operations fell to $600m (£416.8m), a 12% drop from a year ago.

More worryingly, eBay’s earnings guidance for the first quarter does not make for a reassuring read, suggesting little hope for a growth surge in the near term.

Post-Paypal performance

This is the second earnings report from eBay since it separated from PayPal and offloaded its Enterprise division. 

No longer able to hide behind these engines of growth, the core eBay marketplace is somewhat exposed with all its frailties in full view.

“The core eBay marketplace is somewhat exposed with all its frailties in full view”

Malcolm Pinkerton, Planet Retail

However, positive steps are being taken to drive sales growth and profits – such as improving data structure for its listing categories to make it easier for shoppers to find eBay listings through search engine results.

A third of this has been completed, which will provide a boost to sales.

International opportunity

EBay stated that almost 60% of its revenue is derived from international sales.

While this makes it more exposed to the vagaries of currency fluctuations, it also explains why the past 12 months have seen it increasingly up its game in markets like South Korea, Australia and – most recently – Indonesia.

These developing online markets will be essential if eBay is to stay one step ahead of its biggest rival, Amazon.

On that note, it was intriguing to note that no plans are currently in place to widen the remit of the subscription service launched late last year in Germany. This suggests that initial take-up has hardly been spectacular.

Finding new growth markets will be essential, given the increased competitive pressure from Amazon and newer companies such as Etsy and Wanelo.

In order to continue growing, eBay needs net revenue and GMV to show sustained growth. The fact neither currently is, and the outlook for growth remains weak, means that the short-term prospects look bleak.

On a positive note, active buyers grew by 5% to $162m (£112.6). By focusing efforts on enhancing its core marketplace, while continuing to attain active customers, eBay’s long-term prospects may look healthier.