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eBay trims 2014 revenue outlook amid economic fears

Published 15/10/2014, 22:28
© Reuters An eBay sign is seen at an office building in San Jose, California

By Deepa Seetharaman

SAN FRANCISCO (Reuters) - EBay Inc trimmed its full-year revenue forecast on Wednesday, signalling a weaker-than-expected holiday shopping season for the e-commerce company as it prepares to split from its fast-growing payments arm, PayPal.

EBay's report comes as weak economic data from the United States and China fan fears of a global slowdown, forcing investors to re-examine the world economy only just emerging from one of the worst recessions in history.

"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."

EBay shares fell more than 3 percent in after-hours trading.

U.S. retail sales, which account for about one-third of consumer spending, recorded their first decline since January last month.

Some analysts expressed concern over eBay's marketplaces division, which grew less than some forecast.

Kessler added that eBay's notable exposure to Europe might have also played a role in depressing its outlook.

EBay earned 68 cents per share in the third quarter, in line with the average analyst estimate of 67 cents per share, according to Thomson Reuters I/B/E/S.

The results comes weeks after eBay announced it was spinning off its PayPal payments unit in 2015.

EBay cut its full-year revenue outlook to between $17.85 billion (11.15 billion pounds) and $17.95 billion (11.21 billion pounds) from its previous range of $18 billion to $18.3 billion.

© Reuters. An eBay sign is seen at an office building in San Jose, California

The company also forecast fourth-quarter revenue of less than $5 billion, falling short of the $5.2 billion expected by Wall Street. EBay expects fourth-quarter earnings per share between 88 cents and 91 cents, while Wall Street expected 91 cents.

(Reporting by Deepa Seetharaman; Editing by Chris Reese and Andre Grenon)

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