Shares in online shopping portal operator eBay Inc (NASDAQ:EBAY) were bid up in pre-market trading after it released a strong trading statement last night.
The shares, which closed at US$30.23 yesterday, were trading at around US$32.30 in screen-based trading this morning.
Some US$22.3bn of goods were sold on the eBay platform in the quarter, up 2% year-on-year, or up 5% on a constant currencies (CC) basis.
Revenue rose 3% (CC: +6%) to US$2.4bn.
Net income clocked in at US$5.94bn, equivalent to US$5.31 a share, after a massive US$4.6bn income tax benefit related to a legal structure realignment, primarily affecting its international entities, as well as a US$0.8bn gain from the sale of its equity holdings of MercadoLibre.
Stripping out the one-offs, earnings per share came to 54 cents, a penny or so above the consensus forecast, and 14 cents higher than in the same quarter of last year.
"Q4 was a record quarter highlighted by solid performance in our eBay business. During the holiday season, eBay was one of the top consumer shopping destinations in the world and the second most visited eCommerce site in the U.S.," said Devin Wenig, president and chief executive.
"In 2017, we intend to accelerate the progress that we made last year as we continue to execute our business strategy," he said.
Broker Wedbush said the results were in line with expectations, as it maintained its neutral stance on the stock. Its price target moved up to US$34 from US$33 previously.
“We believe EBAY will continue to benefit from the secular growth of e-commerce as initiatives such as site/mobile improvements and structured data help slow the rate of market share erosion. We remain on the sidelines pending signs of sustainable growth reacceleration,” it said.
Share buybacks in the quarter totaled US$1 billion, Wedbush noted, adding that this was a significant step up from the previous quarterly run rate of US$500mln, probably as a result of the windfall from the MercadoLibre sale.
“We expect the rate of buybacks to slow in FY17 given the remaining buyback authorization and domestic cash balance; however, [the] company did indicate that it would repurchase $1 billion in shares in FY17 at a minimum,” Wedbush said.