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Was eBay's "Cautious Outlook" for the Holidays Justified?

Concerns about weak marketplace growth hang over the e-commerce marketplace company.

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Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

When eBay reported its third-quarter earnings in October, CFO Bob Swan’s warning of “a cautious outlook for the holiday season” sent shares tumbling. Reports of industry-wide decelerating growth in e-commerce coupled with a shorter shopping season and unease around the government shutdown were all reasons for concern, he said.

Later today we’ll find out whether that stance was justified, when eBay releases its fourth-quarter earnings report.

So far, some data points over the last three months suggest it was.

In a research report, J.P. Morgan analyst Doug Anmuth noted that comScore is reporting that non-travel e-commerce growth in the U.S. decelerated to 11 percent in the fourth quarter year-over-year, from 13 percent in the third quarter.

More specific to eBay, several analyst reports, including one from Mark Mahaney of RBC Capital Markets, highlighted sales growth data from ChannelAdvisor, a publicly-traded company that helps brands and retailers manage sales of their products across various online commerce sites. ChannelAdvisor reported that its customers’ sales on eBay increased 11 percent year-over-year during the 2013 holiday season, way down from 19 percent in the third quarter.

Still, Wall Street on the whole likes what it sees in eBay’s PayPal unit and thinks continued growth there, as it invests in brick-and-mortar payments products, can help offset weakness in the company’s core e-commerce marketplace.

Wall Street analysts on average are expecting earnings per share, excluding some items, of 80 cents in the fourth quarter on revenue of $4.55 billion.

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