EBay Inc. EBAY -0.97% said Tuesday it would pay a 14-cent dividend in March, its first ever, as the company faces pressure from hedge-fund investors to improve shareholder returns.
The dividend, which is set to be paid on March 20, is part of a broader capital-return plan the company announced. It also added $4 billion to its buyback program. Its authorization was $3.2 billion on Dec. 31.
Overall, the company said it would return about $7 billion to shareholders through dividends and buybacks over the next two years, with $5.5 billion of that happening this year.
The company said it plans to exit 2019 with cash and investments at roughly $3.5 billion. At the end of 2018, the company said its cash, equivalents and nonequity investments portfolio totaled $8.6 billion.
The Wall Street Journal reported last week that hedge-fund investors Elliott Management Corp. and Starboard Value LP have taken stakes in the company and are pushing it to offload its StubHub ticketing and classified-ads businesses.
Additionally, Elliott had said in a letter to eBay’s board that the company could sustain a modest dividend, especially given that it was the slowest-growing technology company of its size without a dividend. It also called on the company to accelerate share buybacks.
For the fourth quarter, the online marketplace posted a profit of $760 million, or 80 cents a share, compared with a loss of $2.6 billion, or $2.51 a share, a year ago.
Excluding one-time items, the San Jose, Calif.-based company earned a profit of 71 cents a share, up from 59 cents the same period a year ago. Analysts polled by FactSet were expecting earnings of 89 cents a share, or 68 cents a share on an adjusted basis.
Total sales rose 6% to $2.88 billion from $2.71 billion a year earlier. Analysts had expected $2.86 billion of revenue for the quarter. StubHub revenue increased 2% from last year to $314 million. The company said that its number of active buyers grew by 4% across its platforms during the fourth quarter.
For the full-year 2019, the company said it expects adjusted earnings between $2.62 and $2.68 per share and between $10.7 billion and $10.9 billion in revenue.
Shares of eBay rose nearly 2.8% during after-hours trading.