By Thomas Halleck - EBay Inc. NASDAQ:EBAY shares fell slightly after the company reported third-quarter earnings that missed Wall Street expectations for revenue on Wednesday. The e-commerce company posted revenue of $4.35 billion, short of analyst expectations of $4.37 billion. EBay reported earnings per share of $0.68, beating estimates by 1 cent, according to analysts polled by Thomson Reuters Eikon.
EBay showed signs of growth internationally in an e-commerce market where it could be challenged by Chinese behemoth Alibaba Group, which made its initial public offering in September. Cross-border sales were up 22 percent and mobile sales were up 21 percent, CEO John Donahoe said during a call to discuss Q3 results.
The company also revised earnings guidance for its fiscal fourth quarter to $0.88-$0.91 per share on revenues of $4.85 to $4.95 billion, less than current estimates of $0.91 per share on $5.16 billion in sales. On Sept. 30, eBay announced that it would spin off payment company PayPal from its online auction site into a separate public company.
EBay said that increased marketing expenses brought down profits, as the company attempted to maintain customer trust following a massive password breach that occurred in May. Keith Terry from Goldman Sachs called out Donahoe for his handling of maintaining customer trust through marketing. He said during the earnings call that "the level of investment [eBay is] making is less than proportionate to the impact this has had on the business."
Donahoe is expected to step down as eBay CEO following the 2015 split.