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UPDATE 3-EBay forecasts robust holiday sales as online shopping drives profit beat

Reuters logo Reuters 10/28/2020 By Akanksha Rana

(Adds analyst quote, details on active buyers; updates shares)

By Akanksha Rana

Oct 28 (Reuters) - E-commerce company eBay Inc on Wednesday forecast holiday-quarter sales above estimates and topped Wall Street profit expectations, as people staying at home due to the COVID-19 pandemic took to online shopping.

Shares of the company, however, fell 5% in extended trade, after it said active buyers rose by just 1 million to 183 million in the third quarter compared to the prior quarter.

"These metrics (active buyers) are likely raising concerns regarding what growth might look like once the COVID-related tailwinds for the business ease," Atlantic Equities analyst James Cordwell said.

Still, eBay said it expects fourth-quarter revenue in the range of $2.64 billion to $2.71 billion, above analysts' estimate of $2.54 billion, according to IBES data from Refinitiv.

"We continue to operate in an environment with low visibility...The dynamics we faced in Q3 were different from what we faced in Q2, and it's clear that Q4 will be different," eBay's interim chief financial officer, Andy Cring, said on a conference call with analysts.

E-commerce firms and retailers with a strong online presence, including eBay and bigger rivals Amazon.com Inc and Walmart Inc, have witnessed a spike in orders, with less brick-and-mortar shopping due to restrictions related to the coronavirus crisis.

EBay also raised its full-year sales outlook to between $10.04 billion and $10.11 billion. The forecast excludes the classifieds business, which eBay in July agreed to sell to Norway's Adevinta in a $9.2 billion deal.

Net income from continuing operations nearly tripled to $621 million, for the third quarter ended Sept. 30.

Excluding items, eBay earned 85 cents per share, above estimates of 77 cents per share.

Revenue rose about 25% to $2.61 billion, beating analysts' average estimate of $2.48 billion.

(Reporting by Akanksha Rana in Bengaluru; Editing by Vinay Dwivedi)

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