Shares of eBay fell 3 percent in after-hours trading despite the company's higher-than-expected first-quarter profit. (Agencies)
During the quarter, eBay took a USD 3 billion non-cash tax charge to access USD 9 billion in foreign earnings. The move will boost available U.S. cash by about USD 6 billion, up from USD 4.4 billion of cash and cash equivalents at the end of March.
Some investors were expecting an even larger first-quarter beat after activist investor Carl Icahn ended his campaign to force eBay to spin out PayPal earlier this month, Wedbush Securities analyst Gil Luria said.
EBay's revenue rose a slightly better-than-expected 14 percent to USD 4.26 billion. PayPal, eBay's fastest-growing division, posted a nearly one-fifth increase in revenue.
"Investors assumed that's because the results were very good and Mr. Icahn was content with what he was seeing," Luria said.
"Expectations were very high going into the quarter," he said. "The results were good, but not as good as some expected."
PayPal has been a key driver of eBay's share value, as the company vies with larger rival Amazon.com Inc, and analysts expect the unit remain a fast-growing business as it expands into offline payments.
The company earned 70 cents per share during the quarter, better than the average analyst estimate of 67 cents per share, according to Thomson Reuters I/B/E/S. But eBay forecast a second-quarter profit between 67 cents and 69 cents, less than the 70 cents per share expected by Wall Street.
During the first quarter, eBay repurchased 33.1 million common shares for about USD 1.8 billion as part of its previously announced USD 5 billion share buyback program.
Shares of eBay fell 3 percent in after-hours trading despite the company's higher-than-expected first-quarter profit.