eBay Earned of 90 Cents per Share

After the closing bell, eBay ($EBAY) reported Q4 earnings of 90 cents per share. That was one penny better than expectations. Three months ago, eBay said that Q4 earnings would range between 88 and 91 cents per share. For all of 2014, eBay earned $2.95 per share. That compares with $2.71 per share in 2013.

Now the bad news. For Q1, eBay said they expect earnings to range between 66 and 71 cents per share. Wall Street had been expecting 76 cents per share. They expect full-year 2015 earnings of $3.05 to $3.15 per share.

The stock is up a bit after hours. Why? The company announced layoffs of 2,400 jobs in order to get ready for the PayPal spinoff. This isn’t really news since the company had already said that layoffs were planned. Today is the day we got the details. But eBay had other news:

EBay also said it would be exploring strategic options for eBay Enterprise, including a sale or initial public offering.

“Enterprise is a strong business,” the company said, but “it has become clear that it has limited synergies with either business and a separation will allow both to focus exclusively on their core markets.”

The company also announced today that it has entered into a standstill agreement with investor Carl Icahn , the company’s largest active shareholder. In addition to certain corporate governance provisions to be adopted by PayPal as an independent company at the time of its spin-off from eBay, the agreement also appointed Icahn Capital executive Jonathan Christodoro to eBay’s current board.

Mr. Icahn, in a statement on its website, said the corporate governance provisions includes limits on any so-called poison pills and prevents a staggered board at PayPal. The provisions were aimed at giving shareholders a greater ability to weigh in on any offers made for the company.

“In the end, it should be the shareholders’ decision. This fundamental belief was the underlying philosophy of many of the corporate governance principles for which we advocated at PayPal,” Mr. Icahn said. “We applaud eBay’s board for making this agreement possible.”

Icahn pushed for this spinoff and he was right. eBay is up 2.66% in after-hours trading.

Posted by on January 21st, 2015 at 4:54 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.