eBay Earnings Dwarfed by Buyback (EBAY)

eBay Inc. (NASDAQ: EBAY) is out with its earnings and the online auction giant reported $0.40 EPS and $2.25 billion in revenues.  Thomson Reuters had estimates of $0.37 EPS and $2.18 billion in revenues.  As far as guidance for next quarter, eBay gave estimates of $0.45 to $0.48 EPS and $2.39 to $2.49 billion in revenues.  Thomson Reuters had estimates of $0.44 EPS and $2.41 billion in revenues.

eBay’s Cash and equivalents were $6.1 billion at the end of the quarter.  The Free Cash Flow was $580.1 million, cash flow from operations was $747.1 million, and operating margin was 28.7%, and operating margin was 21.8%.  Gross Merchandise volume was $12.6 billion on an ex-auto basis.  The company also ended with close to 90 million PayPal accounts.

More importantly, the company authorized up to $2 billion for additional share buybacks and it authorized a commercial paper program of up to $1 billion and has approved the sale of up to $1.5  billion in term-debt financing under an existing shelf registration.  The company spent roughly $300 million buying shares in the last quarter.

eBay shares closed up 0.5% at $25.66 today versus a 52-week range of $19.06 to $28.37.  Shares appear to be indicated flat in after-hours.

JON C. OGG