EBay Plus And Minuses In Balance Following Q2, SunTrust Analyst Says

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EBay's
EBAY
negatives and positives appear to balance out in the wake of its second-quarter performance, SunTrust analyst Robert Peck said Wednesday. EBay's bottom line beat the consensus by a penny, although its revenue missed expectations by a whisker. http://www.benzinga.com/news/earnings/14/07/4707760/ebay-q2-net-ex-items-in-line-with-street-views-volume-up-26 But Peck, in a Thursday note, said $0.02 cents of eBay's earnings were derived from stock buybacks and $0.03 cents from a lower tax rate. On the plus side in Peck's view, eBay noted in a conference Thursday call that it is "open minded" regarding strategic alternatives for its PayPal unit. EBay settled a dispute over PayPal with activist investor Carl Icahn in April, agreeing to name Icahn's choice to a board seat. In exchange, Icahn backed down from proposing the sale of PayPal at an annual shareholders' meeting. Also on the plus side: earnings gains from buybacks and lower taxes, as well as robust growth in payments revenue. Negatives include decelerating growth rate for sold items, to nine percent from 11 percent; narrowing margins, higher customer acquisition costs and a third-quarter outlook below the Street's expectations. Peck maintains a Neutral rating and $58 target on eBay. He cut his third-quarter forecast to earnings of $0.66 cents a share, on $4.35 billion in revenue, from $0.69 a share and revenue of $4.36 billion. EBay traded recently at $51.51, up 1.6 percent.
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Posted In: Analyst ColorAnalyst RatingsCarl IcahnPayPalRobert PeckSunTrust
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