Online shopping

UPDATE 3-EBay predicts dismal quarter as online shopping frenzy wanes

(Adds CFO comment from conference call, ad revenue)

Feb 23 (Reuters) – EBay Inc forecast dismal first-quarter results on Wednesday as the e-commerce platform grapples with falling online demand, fierce competition and supply chain disruptions. global supply, sending the company’s shares down nearly 9% in extended trade.

E-commerce companies reaped big profits as online shopping exploded last year during the pandemic, but the rollout of vaccines could spell trouble as people return to physical shopping.

The biggest rival and online retail giant, Inc, also forecast disappointing sales estimates for the first quarter.

EBay, which is already struggling with a decline in active users, expects another hit as increased investment puts pressure on its margins.

“The second quarter should mark the low point in margins for the year as we navigate tough competition and accelerate our pace of investing,” Chief Financial Officer Stephen Priest said on a post-earnings conference call.

Shares of eBay, which started out as a site where people auctioned off their collectibles, fell to $50.28 in extended trading on Wednesday. They are down 18% so far this year, while the broader S&P index is down 11%.

EBay expects first-quarter adjusted profit of $1.01-$1.05 on revenue of $2.43-2.48 billion; both estimates were below Wall Street expectations.

The company’s revenue and earnings guidance for 2022 also fell short of expectations.

Meanwhile, eBay reported adjusted earnings of $1.05 per share on revenue of $2.61 billion in the fourth quarter ended Dec. 31, above average analyst estimates, according to IBES data from Refinitiv.

Part of eBay’s revenue comes from advertising on its platform which topped $1 billion last year, the company said.

However, gross merchandise volume, the total dollar value of eBay sales of which the company takes a percentage, fell 10% to $20.7 billion.

Annual active buyers on eBay also fell 9% to 147 million in the quarter, the company said.

(Reporting by Eva Mathews in Bengaluru; Editing by Shinjini Ganguli)