EBay to pay shareholders first-ever dividend

Online marketplace eBay announced it will pay a 14-cent dividend, its first ever, on 20 March, after reporting solid top- and bottom-line growth in the fourth quarter of 2018.

The move came after multiple activist investors pressured eBay to boost shareholder returns.

The company also announced it will add US$4 billion to its buyback program.

The online retailer posted a 6 per cent increase in revenue to US$2.9 billion for the quarter ending 31 December 2018 and delivered GAAP net income from continuing operations of US$763 million, or US$0.80 per diluted share, and non-GAAP net income from continuing operations of US$670 million, or US$0.71 per diluted share.

The company generated US$1.2 billion of operating cash flow and US$1.1 billion of free cash flow from continuing operations while also repurchasing approximately US$1.5 billion of its common stock in the quarter.

“We delivered record earnings for the fourth quarter and full year 2018,” said Devin Wenig, eBay president and CEO.

“In 2019, our focus will be on further improvements to the eBay user experience, while pursuing significant long-term growth opportunities in advertising and payments.”

The online marketplace grew active buyers by 4 per cent across its platforms during the quarter, for a total of 179 million global active buyers.

Underlying total eBay performance, the marketplace platforms delivered US$2.3 billion of revenue and US$23.2 billion of GMV. Marketplace revenue growth was 7 per cent on an as-reported basis and 6 per cent on FX-Neutral basis, and GMV was up 1 per cent on an as-reported basis and 3 per cent on FX-Neutral basis.

StubHub revenue grew 2 per cent to US$314 million and GMV of US$1.4 billion, down 2 per cent on an as-reported basis and down 1 per cent on FX-Neutral basis. Classifieds platforms delivered revenue of US$263 million, an 8 per cent increase on an as-reported basis and 11 per cent on FX-Neutral basis.

EBay said it also continued strong execution of its advertising and payments growth priorities during the quarter.

For the full year 2018, eBay delivered an 8 per cent increase in revenue to US$10.7 billion. The company delivered strong operating and free cash flow on a continuing operations basis, generating US$2.7 billion and US$2.0 billion, respectively, during 2018. EBay also returned US$4.5 billion of capital to shareholders through repurchases of its common stock.

For 2019, the company said it is expecting a net revenue between US$10.7 billion and US$10.9 billion, representing organic FX-Neutral growth of between 1 and 3 per cent, with GAAP earnings per diluted share from continuing operations in the range of US$1.83-1.93 and non-GAAP earnings per diluted share from continuing operations in the range of US$2.62-2.68.

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