RPT-PREVIEW-EBay’s Marketplaces growth to dominate
* Faster pace of growth at Marketplaces division expected* GMV, ex-autos, seen rising 14 pct in US — analystBy Alistair BarrSAN FRANCISCO, Oct 17 (Reuters) - The performance of eBay
Inc’s main Marketplaces business will dominate results
from the e-commerce company later this week.EBay has been working on a turnaround of its online
marketplaces for over a year and growth has begun to pick up in
recent quarters.EBay shares are up more than 20 percent so far this year,
but further gains will depend on growth continuing, or even
increasing, analysts and investors said.”Continued acceleration at the core eBay Marketplaces will
be of paramount importance,” said Fred Moran, an analyst at
Benchmark Capital.EBay’s Internet marketplaces, the biggest of their kind,
bring together buyers and sellers and the company makes money
by charging fees on transactions and other activity.The marketplaces business started as an auction website,
but eBay has moved away from that model and now about 60
percent of sales are fixed price.Having more fixed prices has made eBay’s marketplaces more
accessible to a broader audience of shoppers, helping the
company compete better with Amazon.com Inc , the
world’s largest Internet retailer.”The transition to fixed-price has paid off and enhanced
the growth rate,” Moran said. “If that continues in the third
quarter, the stock should be rewarded.EBay is expected to report earnings of 48 cents per share
on revenue of $2.91 billion, according to Thomson Reuters
I/B/E/S. The company is due to unveil results after the stock
market closes on Wednesday.When eBay reported second-quarter results in July, the
company forecast third-quarter revenue between $2.85 billion
and $2.95 billion and earnings of 46 cents to 47 a share.EBay also forecast full-year revenue of $11.3 billion to
$11.6 billion in July and profit of $1.97 to $2.00 a share.A closely watched metric will be the Gross Merchandise
Volume, or GMV, that changed hands on eBay’s marketplaces,
excluding vehicle sales.”How people react to the earnings will depend on how much
GMV has been transacted,” said Bill Smead of Smead Capital,
which owns eBay shares. “We expect not spectacular but steady
improvement there. EBay is participating in the growth of
e-commerce, while a few years ago they weren’t.”Justin Post, an analyst at Bank of America Merrill Lynch,
is expecting U.S. GMV growth of 14 percent in the third
quarter, versus a year earlier. But growth could be as high as
16 percent, he noted.The focus on fixed price sales makes eBay a much more
effective destination for holiday shopping, while the company
has also reduced clutter on its website and improved cataloging
and search functions, according to Post.