- Created on 17 October 2013
LOS ANGELES (AP) -- EBay said the growth rate of e-commerce in the U.S. is slowing as it delivered a weaker-than-expected profit and revenue outlook for the current quarter through December. The company's third-quarter earnings edged past analysts' expectations, but revenue rose just short of estimates.
Following the release of the financial results Wednesday, eBay Inc.'s stock fell 5.3 percent to $50.70 in after-hours trading.
The San Jose, Calif.-based online auctioneer, marketplace host and payments processor said U.S. e-commerce had been growing at an annual 15.5 to 16 percent pace, but it slowed to around 13 percent by the July-September quarter. That softening, plus a weaker U.S. dollar affecting its overseas transactions, led the company to say its annual profit and revenue would come in at the low end of its outlook.
EBay Inc. CEO John Donahoe suggested that the 16-day partial U.S. government shutdown was partly to blame, citing "uncertainty about the government."
"Those uncertainties, frankly, we can't control," he told analysts on a conference call.
In an interview, he said the government shutdown wasn't entirely at fault for the depressed consumer psyche since the deceleration started in July and August. He said he hopes a last-minute resolution ending the gridlock gets passed. "Hopefully that'll have a positive impact," he said.
EBay's forecast for the current quarter through December predicts adjusted earnings of 79 cents to 81 cents per share, below the 83 cents analysts were looking for. The company also said it expects quarterly revenue of $4.5 billion to $4.6 billion, while analysts were estimating revenue of $4.64 billion.
Its annual outlook for adjusted earnings between $2.70 and $2.75 per share and revenue of $16 billion to $16.5 billion was unchanged.
The muted fourth-quarter earnings outlook was partly the result of the company's plans to invest more in a free-shipping pilot that began this month with nine retailers including Levi's, Kenneth Cole and Aeropostale, Donahoe said. The company subsidizes the cost of shipping to a U.S. address if customers pay using PayPal, eBay's payment processing unit, and it is examining adding more retailers to the program.
"We're very encouraged by the early results," he said.
For the quarter through September, eBay's net income grew 15 percent to $689 million, or 53 cents per share, from $597 million, or 45 cents per share, a year ago.
Revenue rose 14 percent to $3.89 billion, thanks to increasing mobile transactions in its online marketplaces eBay and StubHub. It also cited growth in the number of people using PayPal. Revenue was slightly below the $3.91 billion analysts were looking for.
Excluding special items, adjusted earnings came to 64 cents per share, a penny better than expected by analysts polled by FactSet.
Kerry Rice, an analyst with investment banking firm Needham & Co., said the weak outlook might mean weaker-than-expected results at online rival Amazon.com Inc.
He also said eBay's payments revenue came in below forecast because it discounted fees to large clients who agreed to accept PayPal payments. That could mean it is having to cut rates to deal with upstart competitors, he said.
EBay last month agreed to spend $800 million to purchase one such competitor, Chicago-based Braintree, whose success was driven partly by its relatively low fees and high-tech clients such as Airbnb, the vacation rentals site.
- Created on 17 October 2013
WASHINGTON -- WASHINGTON (AP) — Federal officials have received more than 3,800 complaints in the last year from borrowers of private student loans, with common problems related to payment processing and requests for loan modifications.
The complaints against lenders were documented in a report released Wednesday by the federal student loan ombudsman, Rohit Chopra, of the Consumer Financial Protection Bureau.
The complaints represent a tiny fraction of the millions of private student loans outstanding. About 13.7 million private student loans were outstanding at the end of 2011, the bureau and the Education Department estimated.
Many of the repayment problems occurred when borrowers attempted to pay off their loans early or in a certain sequence to lessen the impact of higher interest rates, Chopra said.
"The inability of lenders and servicers to initiate alternative repayment plans that would benefit both the creditor and the borrower continues to be a sign that this market functions poorly," the report said.
Chopra said in a conference call with reporters, however, that he's seeing signs that companies are showing more of a willingness to work with borrowers and he'll be tracking that closely in coming months.
Private student loans generally have higher interest rates than federal student loans and the options to re-finance them are much more limited. Private loans aren't issued as much as they were before the financial meltdown of 2008, but many borrowers still owe money on them.
The bureau estimates that for borrowers graduating at the time of the financial crisis with more than $40,000 in student loan debt, about 80 percent used private loans.
Other common problems commonly received by the ombudsman related to private student loans:
—When borrowers paid what they could afford but the payment was less than what they owed, lenders applied it in a way that maximized penalties for the borrower.
—Late fees were charged even after payments were submitted before the due date.
—Online sites didn't reflect payments made by phone or through the mail.
—Lost paper checks created some obstacles.
—Some borrowers had trouble obtaining accurate payoff information.
—Servicing interruptions after a change in servicers were reported.
Richard Hunt, president and CEO of the Consumer Bankers Association, said the report "skews the reality of today's private loan market" by relying on "sweeping characterization of the market based on 3,800 unverified complaints from 0.002 percent of customers."
The report said the most complaints were lodged against student loan giant Sallie Mae but added that wasn't a surprise because of the company's large volume of customers.
Patricia Christel, a spokeswoman for Sallie Mae, said in an email that 90 percent if its customers manage payments successfully and for others it offers assistance such as loan modifications.
"We're continually seeking ways to improve our customers' experience," she said.
- Created on 17 October 2013
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- Created on 16 October 2013
About 5.2 million poor, uninsured adults will fall into the "coverage gap," created by 26 states choosing not to expand Medicaid under the federal health law next year, according to a study released today by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
These people are projected to have incomes too high to qualify for their state's existing Medicaid programs, but below the federal poverty level (nearly $11,500 for an individual) required to be eligible for federal subsidies to buy private coverage on the new online insurance marketplaces set up by the Affordable Care Act. Medicaid is the state-federal health insurance program for the poor.
"Millions of adults will remain outside the reach of the ACA and continue to have limited, if any, options for health coverage," the study concludes.
The law provides full federal funding for three years to states that expand Medicaid to cover residents under 138 percent of the poverty level (or just under $15,900 for an individual). But the Supreme Court made that requirement effectively optional for states, and most Republican led-states have opted against expanding the program.
There is no deadline by which states must opt to expand Medicaid, and a few states are still considering it.
Nearly half of the uninsured in the coverage gap live in Texas (1 million), Florida (763,980) and Georgia (409,350) — largely because those states have the most uninsured and limited Medicaid eligibility today.
Alabama, Mississippi and Louisiana also will be especially hard hit, with more than a third of their uninsured adults falling into the coverage gap next year, the study shows. These states will feel the pinch because they have higher rates of poor uninsured adults and their existing Medicaid programs have some of the nation's the tightest eligibility rules. Nationally, about 27 percent of uninsured adults in states not expanding Medicaid will find themselves in that gap, the study said.
The study excludes illegal immigrants because they would not have been eligible for coverage under the law. The study was based on Census data from 2012 and 2013 as well as on state Medicaid eligibility rules for 2014.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.