Ebay shares fall after company lowers third quarter guidance

Online marketplace Ebay saw its shares fall overnight after despite posting second quarter earnings that were in-line with consensus estimates, as it warned that analysts' forecasts for the following quarter were slightly too high.

Second quarter earnings and revenue for the California-based company were largely in-line with expectations from analysts.

However, Ebay said its third quarter adjusted earnings per share would come in at between 46 and 48 cents per share, versus a Street forecast for 48 cents.

For the three months to June, the company reported a massive drop in net income from continuing operations in the period from April to June in comparison with the year-ago period.

The stock fell over 4% in after-hours trading ahead of the open on Wall Street

Net profits for the 2017 quarter were just $27m (2 cents per share), while for the same quarter of 2016 that figure was $437m.

According to the company’s CEO Devin Wenig, Ebay has made increased efforts to modernise its operations, just as it faces stiff competition from various rivals such as Amazon.

"In Q2, eBay delivered strong top and bottom line financial results, led by Marketplace acceleration," Wenig said.

"During the past two years, we have made significant progress to modernise eBay and drive growth by improving the customer experience, creating a product catalogue that covers more than half of our inventory, and sharpening the eBay brand. We are on track and focused on creating an even stronger eBay for years to come."

The stock was being called to start the Friday session 5.20% lower at $35.25.