By Greg Bensinger
EBay Inc. is scheduled to report its fourth-quarter financial
results after the market closes Wednesday. Here's what you need to
know.
--EARNINGS FORECAST: Earnings of 89 cents a share, excluding
some items, is the median of estimates compiled by Thomson Reuters,
up from 81 cents a share in the same quarter last year.
--REVENUE FORECAST: Wall Street analysts expect revenue of $4.93
billion, up from the $4.53 billion the online marketplace reported
a year earlier.
WHAT TO WATCH
--SPINOFF: EBay announced a plan in September to spin off its
PayPal payments unit sometime in 2015, creating two publicly traded
companies. The plan is meant to give both units room to grow,
without distraction, eBay said at the time. Investors will be
looking for more details about the mechanics of the spinoff,
including which directors will join which company and how shares
will be divvied up. As well, it remains unclear what agreements the
companies will reach to preserve PayPal as the primary payments
provider for eBay's marketplace.
--PAYMENTS FUTURE: Before announcing the planned split, PayPal
faced new competition from Apple Inc.'s new Apple Pay payment
service tied to mobile phones. While PayPal has a clear lead,
including nearly 160 million active accounts, the unit hasn't shown
how it plans to remain relevant as Apple and other rivals gain
traction. PayPal will need to tell investors more about its plans
to maintain market share, particularly on smartphones. Perhaps Dan
Schulman, recruited from American Express to take the reins as
PayPal CEO following the split, has an eye for payments
innovations.
--JOB CUTS: The Wall Street Journal reported late last year that
eBay is considering a plan to cut at least 3,000 jobs, or 10% of
its workforce, before the company split. That would be largest
round of cuts at eBay in many years, and people familiar with the
matter said the cuts would affect the core marketplace division
more heavily than PayPal. Eventually, the leaner workforce could
make the San Jose, Calif., company a more attractive takeover
target. EBay may use its earnings report to announce layoffs.
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