EBAY ($65-$57-$60)..P/E 192..beats by 1 cent, revs come in higher,
Announced Q4 EPS of $0.14, $0.01 better than consensus; revs of $219.4 mln beat consensus of $211.28 mln.
Update -- In looking at 2001, EBAY draws following conclusions: (1) marketplace is more vibrant than ever (2) inherent vibrancy of business is quickly spreading to markets around the globe (3) EBAY brand and marketplace are rapidly evolving and (4) the company is in a very strong financial position; separately, says it enjoyed the best holiday shopping season ever in Q4... EBAY -3.35 at 60.68
Update -- Remains cautious on outlook for advertising revenue in 1Q02; on a fully allocated basis, expects international business to be profitable for full-year 2002.... EBAY -3.18 at 60.85
Update -- On call, says it believes Q1 top-line growth will be broad-based, driven by transaction growth in the U.S. and its international operations... separately, thinks gross profit as percentage of net revenues can increase to 83%... EBAY -3.43 at 60.60
Update -- Prior 2002 guidance offered at analyst day was for revenues to be $1.05-1.10 bln and EPS to be $0.70-0.73... clarified at the time that it expected about 46% of total revenues and roughly 45% of EPS to be generated in 1H02; accordingly, EBAY says it is on track to meet those targets given 1H02 guidance for revenues to be $490-510 mln and EPS to be $0.32-0.33... EBAY -3.93 at 60.10
Tuesday January 15, 7:12 pm Eastern Time
EBay reports higher Q4 sales, earns, raises guidance
(UPDATE: Adds details and comments)
By Andrea Orr
PALO ALTO, Calif., Jan 15 (Reuters) - The Internet auction site EBay Inc. (NasdaqNM:EBAY - news), on Tuesday reported another period of robust growth and increased its guidance for the first half of 2002, saying the U.S. recession had not slowed its momentum.
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But investors seemed worried that the company could not sustain its strong track record forever, despite raised revenue forecasts for the first half of 2002, and started selling the stock late in the day.
EBay shares, which had risen 87 cents to close Tuesday's regular trading session at $64.03 per share, were trading around $60.50 in after-hours activity following the release of earnings.
EBay reported a fourth quarter net profit of $25.9 million or nine cents per share in the quarter, compared with net income of $23.9 million, or nine cents per share, in the year ago quarter.
Its operating income, excluding a range of costs, totaled $38.5 million or 14 cents per share, in the upper range of expectations of between 12 cents and 15 cents per share.
The company, one of the few Internet businesses that has been consistently profitable, raised its revenue forecasts for the first half of 2002 to between $490 million and $510 million. During a meeting with analysts in October, the company had forecast revenues of just over $460 million for that period.
CAN'T CONTINUE FOREVER
The company also said on Tuesday that its international business, identified as a key source of future growth, achieved operating profitability for the first time during the fourth quarter and would be profitable during 2002 as well.
EBay said its revenues rose to $219.4 million from $134 million year ago. Most analysts had been forecasting revenues of just over $211 million, according to a survey by Thomson Financial.
However some, including Safa Rashtchy of U.S. Bancorp Piper Jaffray, said he had thought revenues might be even higher. He said eBay had started to show it could not maintain its past pattern of exceeding even the most optimistic forecasts and was bound to disappoint eventually.
``My overall concern is that EBay's growth is starting to slow,'' said Rashtchy. ``It can't continue its past growth rate forever.''
Indeed, even though EBay increased its revenue guidance for the first half of the year, most analysts said they had already been expecting the higher number.
EBay also said on Tuesday that it expected to post operating earnings of 32 cents to 33 cents per share during the first half of 2002, which is in line with guidance it has provided previously.
While so many other Internet companies have gone out of business and even some of the industry leaders like Yahoo! Inc (NasdaqNM:YHOO - news) now rack up steep losses, EBay has continued to expand and sign up new customers all over the world with barely a blip.
In an interview after earnings were released, Chief Financial Officer Rajiv Dutta said the latest holiday season was its best ever, despite the recession in its core U.S. market.
STILL A LOT OF BELIEVERS
While EBay's bargain prices have helped make it a top shopping destination during the economic downturn, the company has also been aggressive in adding new product categories, new formats like fixed-price sales as an alternative to auctions, and new geographic sites.
It started the year with eight country-specific sites, and ended with 18, a record Chief Executive Meg Whitman says reinforces the universal appeal of an online trading community.
In just one sign of the traction it has gained overseas, EBay's site in Belgium now accounts for 49 percent of all e-commerce transactions in that country, Whitman told analysts.
Such performance metrics continue to make believers out of a number of eBay watchers.
``I thought it was a very, very good quarter,'' said W.R. Hambrecht analyst Derek Brown, who said he disagreed with the assertion that EBay stock was overpriced. ``EBay continues to outperform by healthy margins, despite economic turmoil and disastrous results of its online and offline peer companies.''
Indeed, even with recent weakness, EBay stock remains close to its 52-week high of $72.74, standing in stark contrast to many peer stocks like Yahoo, which is off more than 50 percent from its peak price for the past year. |
