NEW YORK (AP) -- Shares of eBay Inc. took a hit on Thursday after the e-commerce company said a challenging market in Europe and Korea will weigh on its business in the second half of the year.
THE SPARK: EBay's second-quarter results were strong, with revenue up 14 percent to $3.88 billion as its PayPal business and namesake online marketplace continued to grow. The company kept its guidance for the year intact, but said results may come in at the lower end of its expected profit and revenue ranges. That's below Wall Street's prediction.
ANALYST COMMENT: Baird analyst Colin Sebastian said that while eBay's outlook will likely weigh on its stock in the near future, he's upbeat about the company's prospects, thanks to local and mobile commerce growth and expansion into offline payments. He has an "Outperform" rating on the stock.
Canaccord Genuity analyst Michael Graham said that the company's business is still robust, despite a "slight pause in growth," and its guidance implies that there will be a big pick-up in business in the fourth quarter.
BACKGROUND: The fourth quarter tends to be the biggest one for eBay because of the holiday shopping season, which could help the results for the full year meet the company's target. And PayPal, eBay's fastest-growing business, continues to grow. It added 4.7 million active registered accounts, ending the quarter with 132 million users.
SHARE ACTION: EBay's stock fell $3.90, or 6.8 percent, to $53.48 in afternoon trading. The stock has traded in a 52-week range of $42.81 to $58.04.
- Investment & Company Information