EBAY ( $45 run $52) Beats Street with Record Income
By Michael Mahoney, www.EcommerceTimes.com
Adding to the recent wave of profitable earnings reports, eBay (Nasdaq: EBAY - news) announced Thursday that net income for its first quarter 2001 was US$21.1 million, or 8 cents per diluted share. The earnings beat analyst predictions.
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San Jose, California-based eBay said that its pro forma net income of $30.6 million was a company record for a quarter.
eBay's net revenues of $147.4 million showed a 90 percent increase in year-over-year growth and 20 percent sequential growth from the $77.4 million reported in Q1 2000.
eBay also increased its expectations for the second and third quarters of 2001, saying that consolidated net revenues over the next two quarters could be as much as $10 million to $15 million higher than previously anticipated.
"Despite our optimism for the future, we will continue to watch for signs of a decrease in the consumer spending market," eBay chief financial officer Rajiv Dutta said. "But to date, we've seen no signs of such a slowdown, and seen strong buy demand across the online business. The overall business model is in very good shape and really hasn't changed in any way (since the IPO days)."
Momentum Builds
eBay president and chief executive officer Meg Whitman attributed the continued increase in eBay's trading velocity and success for the quarter to the increased penetration (30 percent) of the Buy It Now service (which allows buyers to instantly buy an auction item), the new surcharge implemented on 10-day auctions, and the increase in trading of higher priced items, such as automobiles.
eBay's gross margins rose 9 percent compared to the first quarter of 2000, reaching 82 percent. The company said it expects its gross margins to remain above 80 percent throughout 2001.
The company also said that it added over 7.2 million users during the quarter, to end the first quarter with 29.7 million registered users.
Shares of eBay closed at $49.99 on Thursday, up $4.24, an hour before the company released the first quarter results. In after-hours trading, eBay had risen to $53.40, a 16.7 percent increase over the previous day's close.
Bigger Half.com
eBay also announced a move to significantly expand Half.com's existing marketplace, introducing hundreds of new categories for buying and selling new, overstocked, remaindered and used products in four areas: consumer electronics, computer equipment, sporting goods and trading cards. So far, Half.com has concentrated on books, music, video games and movies.
eBay chief executive officer Meg Whitman said that Half.com's fixed-price trading is one key to the continued expansion at eBay.
"This is a very important step for eBay," Whitman said. "Fixed-price trading is quickly becoming an important part of eBay's global marketplace."
Branching Out
eBay's first quarter was marked by an attempt to establish a strategic network of partners throughout cyberspace.
In March, eBay announced several alliances, including a deal with Microsoft to integrate eBay's auction marketplace into selected Microsoft Web sites. In addition, under that deal, eBay agreed to use Microsoft's Passport and .NET products.
Other deals announced in March by eBay include a pact with Artnet.com, making Artnet.com's fine art pricing database available to eBay Premier customers, and an alliance with Eppraisals.com giving eBay users access to professional appraisers in the art and antiques categories.
International Push
eBay has also said that its goal is to be in 10 countries by the end of the year and 25 by the end of 2005.
To that end, last month, eBay announced that it had launched new Web sites in Ireland, New Zealand and Switzerland. Also, in February, eBay inked an all-stock acquisition, estimated to be worth up to $112 million, to purchase European online auctioneer iBazar S.A.
"Our international sites may reach profitability sooner than we had anticipated even six to eight months ago," Whitman said, adding that eBay Germany is the company's most mature, developed market. |
