eBay Stock Falls Hard After Earnings

This year, eBay is going to make somewhere near $2.10 per share in profit, which amounts to somewhere near the $2.5 billion mark. This takes earnings back to the 2011 level due to the Paypal spinoff last July, though eBay has replaced the fast-growing Payal in its collection of subsidiaries with StubHub. The ticket exchange subsidiary, which reported revenue growth of 34%, currently represents $232 million of eBay’s overall $8.6 billion in annual revenues.

Because the corporate expenditures involve maintaining the integrity of the website, the company is able to report absolutely stunning 27% net profits of all expenditures. That $2.5 billion profit figure compared to $8.6 billion in revenues is a very impressive relationship that bodes well for shareholders because it suggests a large amount of current earnings can be extracted from the business for dividends or share repurchases without harming the competitive competition of the firm.

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