EBay Posts 1st-Quarter Profit

[FlyingDonut]

SAN JOSE, Calif., Apr 23, 2003 (AP Online via COMTEX) -- Driven by the surging popularity of online auctions at home and abroad, eBay Inc. posted a first-quarter profit of $104.2 million, more than double the amount it earned in the same period last year.

The San Jose-based leader in online auctions reported Tuesday that it earned 32 cents per share on revenue of $476.5 million. In the comparable period of 2002, eBay earned $47.6 million, or 17 cents per share, on revenue of $245.1 million.

 

Excluding certain items, the company said it earned $116.2 million, or 36 cents per share in the first quarter, which ended March 31. Financial analysts polled by Thomson First Call were expecting 32 cents per share.

 

Meg Whitman, president and CEO of eBay, called the first quarter results "terrific." She said she was particularly pleased by the strength of categories such as automobiles, computers and technology, as well as fashion, which traditionally trails off after the fourth quarter holidays but remained strong in early 2003.

 

"We are now more confident than ever in eBay's long-term potential across every facet of our business," said Whitman, whose goal is to achieve annual revenue of $3 billion by 2005.

 

Based on the success of the first quarter, typically eBay's strongest, the company raised guidance for second quarter earnings to as high as 30 cents per share on revenue of as much as $500 million. Previously, eBay forecast earnings of 27 cents on revenue of as much as $460 million in the usually weak second quarter.

 

The company increased yearly earnings estimates by $150 million, to $1.27 per share on revenue as high as $2.05 billion.

 

The total value of the 220 million goods sold through eBay in the quarter - from used wedding gowns and space shuttle memorabilia to computers and antique cars - was a record $5.32 billion. That's a 71 percent jump from the $3.11 billion it reported in the first quarter of last year.

 

EBay's base of registered users expanded to 68.8 million in the first quarter, up from 61.7 million in the last quarter of 2002 and 46.1 million in the comparable period last year.

 

The success of eBay - one of the few survivors of Silicon Valley's shakeout, which began with the stock market slide in the spring of 2000 - hinges on steady market share gains in more than two dozen countries, particularly those in Europe. EBay is the No. 1 e-commerce site in Germany, and sales there are growing at triple-digit rates.

 

Although eBay pulled up stakes in Japan more than a year ago, the company's international revenue was $137.5 million in the first quarter of 2003, a 166 percent jump from the same quarter last year. International sales represent 21.4 percent of the company's revenue.

 

EBay has also become a Wall Street darling for its profit margins - high even in the technology sector, where gross margins of 50 percent or more are common. EBay's gross profit in the first quarter was a record $384.4 million, or 81 percent of net revenue.

 

EBay's quarterly operating margins - another measure of how lean a company is - were about 35 percent, among the highest in the technology industry. During the conference call, an analyst asked chief financial officer Rajiv Dutta what could stop the operating margin from hitting 50 percent.

 

"Frankly, one of the things we have to think about in the future is not how high the numbers can be, but what we need to balance our needs for the future," Dutta said, noting that the company planned to plow money into research.

 

Although Whitman called eBay's financial outlook "evergreen," meeting Wall Street's heady expectations could be eBay's biggest challenge.

 

EBay's price to earnings ratio - a measure of Wall Street's expectations for stock performance - is 106.76. By contrast, the p-to-e ratio Tuesday for Microsoft Corp. was 28.98, IBM Corp. was 38.41 and General Motors Corp. was 11.

 

Shares in eBay fell $1.53 to $89.22 each in trading on the Nasdaq Stock Market before the company announced its results. The stock rose $2.62 in the after-hours session. Its 52-week high is $92.

 

By RACHEL KONRAD AP Business Writer

 

 

[12c_Comic]

Maybe we should start your own on-line auction house and call it UPayBay.......

[aardvark88]

Since the cgc/Heritage mkt is supposed to be crashing, we should allocate some of our resources to eBay stock.

[fazman]

Any word on Paypal PROFIT !!! results.

[FlyingDonut]

already have...got in at the IPO.

[murph0]

That's good news, well not to me..since I sold my shares over a year and a half ago

 

Brian