EBay Inc (NASDAQ:EBAY) has joined the list of companies that have cut down their 2014 revenue projections due to a blurry fourth quarter. The outlook is a sign of lower than expected shopping over the coming holidays.
The company had initially given a 2014 revenue outlook of between $18 billion and $18.3, but has now trimmed it to $17.85 billion and $17.95 billion. The fourth quarter mid-point is $4.9 billion compared to $5.2 billion that had been projected by analysts. This projection comes at a time when there are fears that the economic slowdown could adversely affect businesses. The fears have compelled several companies to reexamine their revenue projections for the year.
EBay Inc (NASDAQ:EBAY) has forecasted fourth quarter earnings per share of between 88 cents and 91 cents, while analysts expected 91 cents.
“We’ve gotten indications from some luxury retailers over the last couple of days that times have been more challenging,” said Scott Kessler, equity analyst at S&P Capital IQ. “There are a lot of question marks when it comes to the sentiment on spending of consumers as we approach the holiday shopping season.”
This news is also coming at a time when EBay Inc (NASDAQ:EBAY) is planning a spinoff of its financial arm, Paypal. Many investors have lauded the pending spinoff, saying it’s a move towards the right direction.
The company only registered a 6% revenue growth in third quarter compared to the expected 12%.
Shares of the U.S. retailer fell more than 3% yesterday in after-hours trading after the news of the revenue outlook came to press.
This article has been written by Victor Ochieng.