Features

EBay’s tripled profits beat Wall Street forecasts

By Brian Bergstein The Associated Press
Friday July 20, 2001

SAN JOSE — Second-quarter profits more than tripled at eBay Inc., and the mammoth Internet marketplace said Thursday that business will be even better than expected the rest of the year. 

In the three-month period ending June 30, eBay earned $24.6 million, or 9 cents per share, on revenue of $180.9 million. In the year-ago quarter, the company earned $7.5 million, or 3 cents per share, on revenue of $98.2 million. 

Excluding one-time charges, eBay’s earnings would have been 12 cents a share, above analysts’ expectations of 9 cents, according to Thomson Financial/First Call. 

“We’re really proud of how the company is running right now,” said Meg Whitman, eBay’s president and chief executive. 

Shares of eBay fell $2.14, more than 3 percent, to close at $64.40 on the Nasdaq Stock Market before the earnings report. The stock jumped to $66.89 in the extended trading period. 

Not counting users brought on with the acquisition of a European auction site, iBazar, eBay registered more than 4.4 million new users in the second quarter and now boasts more than 34.1 million, more than double the total this time last year. 

That surge could help increase revenue in the second half of the year to between $385 million and $400 million, which is $15 million to $30 million higher than previous forecasts. EBay also said second-half earnings per share, excluding charges, are expected to be as much as 21 or 22 cents; Wall Street was expecting 20 cents. 

Many measurements of eBay’s business are giving executives reason for such optimism. About $2.25 billion worth of goods were sold on the site in the second quarter, up 74 percent from last year. International operations are contributing 14 percent of the company’s revenue, up from 12 percent in the first quarter. 

EBay also is attracting more big sellers through its new “storefronts” program, in which merchants can get entire pages to themselves. About 18,000 merchants have signed up, far more than eBay had expected at this point, said Brian Swette, chief operating officer. 

For the first six months of 2001, eBay earned $45.7 million, 16 cents per share, on revenue of $335 million. That compares to first-half profits last year of $9.2 million, 3 cents per share, on revenue of $184 million. 

Jeetil Patel, an analyst with Deutsche Bank Alex. Brown, pointed out that eBay’s solid results came despite the sluggish economy and in a warm-weather quarter – when business traditionally slows because many computer users tend to spend more time enjoying the outdoors. 

“That’s pretty impressive,” Patel said. “They’re knocking the cover off the ball.”