On a GAAP basis, eBay posted a per share loss of $1.82 primarily due to a $3 billion tax charge related to the repatriation of $9 billion in foreign earnings that had been held offshore. Including the repatriation tax, the company’s effective tax rate in the quarter was 366%. Excluding the charge the company’s tax rate was 18%. The company added $6 billion to its onshore cash holdings.
During the quarter CEO John Donahoe settled differences with activist investor Carl Icahn by adding an independent director acceptable to Icahn to eBay’s board. Icahn had been pushing for a spin-off of the company’s PayPal division.
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And speaking of PayPal, revenue in the first quarter totaled $1.8 billion and the service ended the quarter with 148 million active registered accounts, a jump of 16%. eBay’s marketplaces revenues totaled $2.2 billion and added 4.7 million active buyers, up 14% to 145 million.
The CEO said:
We are committed to delivering sustainable shareholder value and focusing on what matters most to our investors. We are executing our growth plans, capitalizing on the synergies in our portfolio and aggressively executing our $5.0 billion share buyback program.
The $6 billion in repatriated funds is probably going to pay for that buyback program.
The company’s second quarter outlook calls for revenues of $4.325 to $4.425 billion and adjusted EPS of $0.67 to $0.69. For the full year, eBay expects revenues of $18 to $18.5 billion and adjusted EPS of $2.95 to $3.00. The second quarter outlook is below the consensus and is pushing the shares down in after-hours trading today.
eBay’s shares closed at $54.54 today in a 52-week trading range of $48.06 to $59.70. Shares are down about 3.4% in after-hours trading at $52.66. Thomson Reuters had a consensus analyst price target of around $63.20 before today’s report.
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