On The Fly: What to watch in eBay earnings report

eBay (EBAY) is scheduled to report results of its third quarter after the market close on Wednesday, October 18, with a conference call scheduled for 5:00 pm ET. What to watch: 1. GROSS MERCHANDISE VOLUME: In the second quarter, eBay reported that its gross merchandise volume, or the amount of sales it helps facilitate, grew 3% on an as-reported basis, and 5% in constant currency, to $21.5B. This growth rate was up from the first quarter growth of 2% on a reported basis, and 5% in constant currency, following a flat growth rate in the last quarter and growth rate decelerations in the two quarters prior to that. Investors will be anxious to see if the company can continue to accelerate GMV growth. 2. GUIDANCE: With its last report, eBay guided to Q3 adjusted earnings of 46c-48c per share. The consensus remains at 48c, the same as when the outlook was provided. The company pointed toward Q3 revenue of $2.35B-$2.39B. The consensus forecast, which was $2.32B at the time of the company’s report, has increase to $2.37B. 3. MARKETPLACE INITIATIVES: eBay has taken on initiatives to improve the user experience including structured data implementation, user-optimized homepages, guaranteed delivery and price match guarantee. The company also launched an updated marketing campaign in June called “fill your cart with color” which included national TV spots, billboards and social online ads and in July, the company announced that Shopify (SHOP) merchants would be enabled to list and sell their products on eBay directly from their Shopify account. The company also reportedly experienced its two best sales day ever for July during Amazon’s (AMZN) Prime Day after ramping up its marketing campaign. Active user growth should show how effective the company has been at improving user experience and visibility. 4. ACCELERATION GROWTH: In August, Baird analyst Colin Sebastian said his proprietary eBay Tracker indicated that the unusual acceleration in growth noted in June had continued through mid-July. He did note the early August activity appeared to return to normal levels. The analyst anticipates the combination of user experience improvements and large-scale advertising should lead to accelerating growth through 2017.