EBay on Thursday forecast that adjusted profit this quarter could fall below analysts’ estimates, as it continues to invest in marketing and in revamping its platforms to attract more shoppers, sending shares down more than 4 percent.

San Jose, California-based eBay forecast third-quarter adjusted earnings of 46 to 48 cents per share. Analysts on average were expecting 48 cents per share, according to Thomson Reuters.

The online marketplace is making a big push to catch up to e-commerce rivals like Amazon.com with three-day guaranteed delivery, a new home page and more user-friendly website. Spending millions of dollars on marketing campaigns, it is working to distinguish itself as a haven for unique items online rather than commodity products.

“Our focus continues to be on improving the customer experience, and we won’t hesitate to trade off short-term results when necessary,” eBay Chief Executive Devin Wenig said on a call with analysts.

Shoppers so far have responded well to eBay’s new home page, showing lower bounce rates and better engagement, he said.

Revenue for the just-ended quarter rose 4.4 percent to $2.33 billion, beating analysts’ estimates of $2.31 billion. Excluding one-time items, eBay earned 45 cents per share, in line with analysts’ estimates.

“Results and guidance suggest the year is ‘on track,’ although there will be some disappointment without a solid beat and raise,” Baird Equity Research analyst Colin Sebastian said in a research note. “There is unlikely a ‘quick fix’ to eBay’s slow volume growth profile.”

Sales and marketing costs weighed on the quarter, rising 2.4 percent to $637 million. So did subsidiary ticket exchange StubHub, which saw lower gross merchandise volume — the value of goods sold on its website — fall 5 percent from a year earlier.

Wenig said the U.S. events landscape was far weaker than the company was expecting.

Shares of the company, up about 25 percent so far this year, dipped 4.5 percent to $35.50 in after-hours trading.

“I think the stock was running hot into the quarter, though, and I think eBay is signaling they are going to market aggressively heading into Q4, and maybe some were looking for a guidance raise,” said Daniel Kurnos, Benchmark Company analyst.

EBay also announced a $3 billion share repurchase program.

Source: Tech CNBC
EBay shares fall on tepid profit forecast