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JCPenney's Ron Johnson: 'Customers Don't Get Our Pricing Strategy'I just got off eBay's first quarter earnings call and no longer am I quite so surprised that the stock sold off in after-hours trading after the auction giant released its results. The stock fell 5% to $38.42 after today's 5 p.m. ET announcement.
On the face of it, the results weren't bad. EBay met Wall Street's estimates and exceeded its own guidance -- although it did some weird monkeying around with "non-GAAP" results that used to be known as "pro-forma" and would have been higher if it weren't for stock option expensing and new accounting rules. (Just give us the straight scoop, next time, okay?).
The release's second subhead was a real grabber: "Q1 GAAP Diluted EPS of $0.17 and Non-GAAP (pro forma) Diluted EPS of $0.24." Catchy, right?
But that's not why the stock sold off.
The culprit, I think, was a palpable lack of enthusiasm on the part of the management team. On the conference call, Meg Whitman was confident, as usual, but wasn't all that reassuring about future growth. She talked about how new initiatives like eBay Express could really change dynamics on the site in ways she couldn't predict. She said the increasing visibility of eBay stores in the U.S. had hurt the customer experience in Q1. (More on that in later posts).
The new CFO, Bob Swan, who just started a month ago, was downright cautious. One analyst wanted to know why he was keeping full-year guidance the same when the first quarter had exceeded plan. His answer? Basically that he's only been on the job a month and wanted to be conservative.
So much caution about the near-term future is hardly the stuff that makes investors want to run out and buy the stock. And apparently, it makes some of them rush out and sell.
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