Ebay have seen their shares rise after reporting a strong performance in its third quarter trading, and a promising forecast for the fourth quarter.
The e-commerce giant from the United States of America predicted an increase in the fourth-quarter profits of the company. It forecasted above analyst estimates last Tuesday, despite Amazon’s announcement last week that its profits will unfortunately be disappointing across the upcoming holiday period. Ebay considers Amazon as one of its rival.
The shares in Ebay also surpassed the estimates of analysts on profit for its third quarter. It increased by six percent in after-hours trading. The shares of the company rose by 6 percent in the last window of trading, with the company announcing net profits for the three months to the end of September increasing to $721 million (£567 million), which represents a 38.6 percent on-year increase. The amount is up from the $520 million that was reported a year earlier. On the other hand, the revenue of the company was able to meet analyst expectations to report $2.65 billion for the third quarter.
The results come only a day after Philip Hammond, the British Chancellor, revealed his plans to impose a digital services tax, which would see the company be hit with a two percent tax on its revenue. Last year, Ebay was imposed with an additional £7 million tax bill after a review that was conducted by the HMRC.
The retailer attributed most of its recent successes to major investments in brand marketing, product developments, and simplifying its payment process and raising its number of active buyers up from 175 to 177 million between the second and third quarters.
The president and chief executive of Ebay, Devin Wenig, stated: “This quarter we continued to make foundational investments to improve the long-term competitiveness of our marketplace while setting the stage for significant growth opportunities.”
He added: “We will continue to innovate the customer experience while executing our growth initiatives in payments and advertising to position Ebay for future success.”