The eBay logo outside the entrance to its headquarters building.

eBay (EBAY) is set to announce its second-quarter earnings results on Wednesday after market close. Analysts expect it to post revenue of $2.67 billion in the quarter, a rise of 1.3% YoY (year-over-year) and up from $2.64 billion in the second quarter of 2018. EPS is expected to be at $0.49 compare to same time last year of $0.39.


eBay has managed to beat analysts’ EPS estimates in each of the last four quarters:

The e-commerce platform gave investors some much needed confidence when it released better-than-expected first-quarter results, sending the shares 5% higher the day after its report. That built on already impressive gains, as the stock is up nearly 40% so far this year.

Can eBay continue to climb with its second-quarter results? Let's take a look at some of the things shareholders will be watching.

Revenue growth

eBay grew revenue by just 2% year over year in the first quarter, but that was actually better than it looked and comfortably ahead of both management's forecast and analysts' consensus estimates. When adjusting for the impact of foreign-currency exchange rates, growth would have topped 4%. Revenue was helped by strong eBay Marketplace sales and a growing cadre of global active buyers on its platform.

For the second quarter, eBay's management is guiding for revenue in a range of $2.64 billion to $2.69 billion, which would represent growth of 3% at the midpoint of its guidance, excluding the impact of exchange rates.

To put that into the perspective of investor sentiment, analysts' consensus estimates are calling for second-quarter revenue of $2.67 billion, near the middle of the company's estimated range.

Profits

eBay handed investors an unexpected surprise when it reported earnings in the first quarter, delivering adjusted diluted earnings per share (EPS) of $0.67, ahead of both management's forecast and analysts' expectations, which both clocked in at $0.64.

The company made good on its promise to reduce low ROI (return on investment) marketing spending and focus on driving positive buyer growth. These actions resulted in more money dropping to the bottom line; hence, the better-than-expected EPS.

For the upcoming second quarter, management guided for adjusted EPS of between $0.61 and $0.63.

User growth

One of the keys to unlocking eBay's future potential is its ability to attract new users to its platform. In the first quarter, eBay reported that global active buyers for the trailing-12-month period grew to 180 million, up 4% year over year.

On the conference call to discuss the results, eBay CEO Devin Wenig said the company was undertaking measures designed to drive "positive buyer growth," though he didn't elaborate on exactly what those measures would entail. Look for further updates on these initiatives.

Activist investors

One factor that has been on the minds of eBay investors recently has been moves against the company by activist investors. eBay's board of directors received notification from Elliott Management disclosing a 4% stake in the company, along with a laundry list of suggestions designed to unlock value for investors. Hedge fund Starboard Value also notified eBay management that it had acquired a stake of less than 4% and said that the company should spin off some of it's non-core businesses to focus on its core platform.

eBay responded by saying it would undertake a review of its business and work collaboratively with the activist investors to undertake new initiatives to create shareholder value. Look for eBay to provide updates on the ongoing saga.

eBay will report its second-quarter results after the market close on Wednesday, July 17.