The Zacks Analyst Blog Highlights: eBay, Amazon, Google, Mastercard Incorporated and PulteGroup

CHICAGO, April 29, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: eBay Inc. (Nasdaq: EBAY), Amazon.com (Nasdaq: AMZN), Google Inc (Nasdaq: GOOG), Mastercard Incorporated (Nasdaq: MA) and PulteGroup Inc. (Nasdaq: PHM).

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Here are highlights from Thursday's Analyst Blog:

eBay Reports In-Line Quarter

After the market closed yesterday, eBay Inc. (Nasdaq: EBAY) reported fourth quarter earnings of 40 cents, which was in line with the Zacks Consensus Estimate. eBay saw cost escalation in the last quarter and it was only the better-than-expected revenues that enabled it to meet expectations.

Revenue

Gross revenue of $2.55 billion was up 2.0% sequentially and 15.9% year over year, exceeding the Zacks Consensus Estimate by 2.8% and at the high end of eBay's guidance range of $2.4-2.5 billion.

Nearly 88% of total revenue was transactions-based, while the remaining 12% came from marketing services. Both transactions-based revenue (up 1.9% sequentially) and marketing services revenue (up 2.6% sequentially) contributed to the revenue upside versus guidance. They were also up 14.8% and 24.0%, respectively from a year ago.

Outlook

Management expects second quarter 2011 revenue of $2.55-2.65 billion (flat to up 4% sequentially, up 15-20% year over year), GAAP EPS of 36 to 37 cents and non GAAP EPS of 45 to 46 cents.

For 2011, management expects revenue of $10.6-$10.9 billion (previous $10.3-10.6 billion), GAAP EPS of $1.53 to $1.58 (previous $1.56 to $1.61) and non GAAP EPS of $1.93 to $1.97 (previous $1.90 to $1.95).

Conclusion

eBay reported another good quarter and provided encouraging guidance. The fixed price format, while impacting margins negatively, is making the company more competitive and management's focus on technological improvements will further improve customer satisfaction.

Shares have responded positively to the news, but we are concerned about increasing competition from major online retailers, such as Amazon.com (Nasdaq: AMZN), as well as many other smaller players. Additionally, Google Inc (Nasdaq: GOOG) has been making some plays in the online retail space that potentially increase competition for the company. We also think that eBay's payments business will sooner or later be impacted by online payment platforms from Mastercard Incorporated (Nasdaq: MA) and other banks (in addition to Google's Checkpoint).

eBay shares currently carry a Zacks #3 Rank, indicating a short term Hold recommendation.

We believe eBay will continue to see higher volumes, the impact of which will be partially offset by higher costs, weaker pricing and shrinking margins.

Our longer term rating on eBay shares stays Neutral.

Pulte's 1^st Quarter Disappoints

PulteGroup Inc. (Nasdaq: PHM) reported a much wider loss of $40 million or 10 cents per share in the first quarter of 2011 compared with a loss of $12 million or 3 cents per share in the corresponding quarter of 2010. However, per share loss was lower than the Zacks Consensus Estimate of a loss of 14 cents per share.

Consolidated revenues in the quarter slipped 26.7% to $805.2 million from last year's $1.02 billion. However, revenues exceeded the Zacks Consensus Estimate of $792 million. The decline in consolidated revenues was attributable to lower revenues generated by each of the company's segments mostly driven by low levels of demand and increased competition. 

Revenues from the Homebuilding segment amounted to $783.8 million, down 26.3% from $989.8 million a year ago driven by reduced revenues from both home sales as well as land sales. Home sales slashed 19.8% to $782.5 million and land sales dropped almost 90% to $1.3 million this quarter.

Lower home sales for the quarter reflected a 17% decrease in closings to 3,141 homes along with a 3% decrease in average selling price to $249,000. The decrease in average selling price primarily reflects a shift in the mix of homes closed during the quarter.

Excluding impairment charges, interest expense and merger-related costs, home sale gross margin improved to 16.9% from the year-ago gross margin of 16.3% led by changes in the mix of houses closed and the ongoing cost-efficient initiatives.

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