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Ahead of the Bell: EBay to post 1Q results

NEW YORK (AP) -- E-commerce company eBay has a "healthy long-term outlook" but faces some short-term challenges, including tight retail inventories and potential pressure from credit card companies on its PayPal unit's profit margins, a Benchmark analyst said Tuesday.

The company is scheduled to report its first-quarter results after the stock market closes.

"We have consistently believed eBay's long-term outlook was being understated, particularly with regards to the Payments platform,," analyst Daniel Kurnos wrote in a note to investors. He said he suspects eBay could exceed the high-end of its new growth targets, depending on adoption rates of mobile commerce and the success of its point-of-sale platform, which allows merchants to accept payments through PayPal at stores.

The company said last month that it expects revenue to reach $21.5 billion to $23.5 billion in 2015, up from $14.1 billion in 2012.

But Kurnos said he's more cautious about the company's short-term outlook, as expectations are rising to reflect its stronger long-term forecast. Its fast-growing PayPal unit could also face some hurdles.

"In addition to actual results and (second-quarter) guidance, we suspect a lot of attention will focus on commentary from MasterCard regarding the implementation of a 'staged wallet fee,' essentially taxing digital intermediaries like PayPal and Square," he wrote.

For the first quarter, analysts, on average, are expecting adjusted earnings of 62 cents per share on revenue of $3.77 billion, according to FactSet.

In January, eBay Inc. said it expects adjusted earnings of 60 cents to 62 cents per share, on revenue ranging from $3.65 billion to $3.75 billion.

Shares closed Tuesday at $57.01, up nearly 12 percent for the year. In premarket trading, eBay slipped 41 cents t $56.60/